Race To Acquire HDFC Credila May Be Over, Stage Set For HDFC Merger

BPEA EQT, formerly known as Baring PE Asia, is reportedly set to acquire educational loan provider HDFC Credila for $1.3 billion to $1.5 billion (Rs 10,738.6 crore-12,390.7 crore), beating out offers from other private equity competitors including Carlyle, TA Associates, Blackstone, and CVC Capital.

What Happened? A consortium formed by BPEA EQT and Chrys Capital has won the race to buy the education loan arm of HDFC, paving the way for the much-anticipated merger between HDFC and HDFC Bank, the Economic Times reported, citing sources.

The deal is likely to be formally announced by the end of June. The Reserve Bank of India (RBI) has instructed HDFC to cut down its stake in the education loan division to 10% within two years as a requirement for the HDFC-HDFC Bank merger.

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Credila is among India’s leading education finance companies and concluded the March quarter with a loan book worth Rs 15,238 crore. The largest portion of Credila’s business comes from student loans for education in the United States.

"Baring has had its eyes on the asset for years, and in the past scoped it out multiple times," a source told the business daily. "Given that India has over 30 million students in tertiary education and over 250 million students in K-12, the demand for education loans continues to be extremely strong."

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