The biggest merger in Indian corporate history has opened the door for private equity giant EQT to enter the country’s education finance market. As part of HDFC Bank’s union with its parent, the latter will sell a 90% stake in HDFC Credila to a consortium consisting of the Swedish fund’s Asian unit, BPEA EQT, and local investor Chrys Capital.
a 90% stake in HDFC Credila to a consortium consisting of the Swedish fund’s Asian unit, BPEA EQT, and local investor Chrys Capital.
The deal is touted as the largest ever PE buyout in the country’s financial sector and values Credila at roughly 101 billion rupees , or roughly 37 times earnings in the last financial year. To compare, consumer loan champion Bajaj FinanceThe target specalises in education financing for those looking to universities in the United States, the UK and Canada for higher education.
The buyers will also inject 20 billion rupees into Credila, which should help give the company, already a market major, an edge over rivals including state-controlled banks and the Warburg Pincus-backed Avanse Financial Services. This is a private equity deal worth studying.
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