MUMBAI (Reuters) – Indian mortgage lender Housing Development Finance Corporation said it had agreed to sell an about 90% stake in its education finance arm to a consortium of BPEA EQT and ChrysCapital for 90.60 billion rupees ($1.11 billion).
In what would be the country’s largest-ever private equity buyout in the financial services sector, the consortium valued HDFC Credila Financial Services at a pre‐money valuation of 103.50 billion rupees and will infuse primary proceeds of 20 billion rupees into the company, HDFC said in a release late Monday.
The announcement comes ahead of HDFC’s $40 billion merger with HDFC Bank that is proposed to be completed next month.
The Reserve Bank of India had asked HDFC to reduce shareholding in HDFC Credila to 10% within two years of the effective date of the merger.
Post the stake sale, HDFC will have a stake of 9.99% in HDFC Credila.
Jefferies acted as the exclusive financial advisor to HDFC and HDFC Credila on the transaction.
The transaction is subject to regulatory approvals from the RBI and the Competition Commission of India, HDFC said.
The proposed transaction will be completed within 15 business days from the completion of all conditions precedent, including receipt of regulatory approvals, it added.
($1 = 81.9480 Indian rupees)
(Reporting by Siddhi Nayak)