HDFC Bank receives RBI approval to sell stake in HDFC Credila

HDFC Bank said that it has received approval from markets regulator Reserve Bank of India (RBI) to offload 90 percent of HDFC Credila’s total issued and paid-up share capital.

The company said in an exchange filing, “ This is in connection with our earlier intimation dated June 19, 2023, wherein we had informed that erstwhile Housing Development Finance Corporation Limited (“HDFC Limited”) had executed definitive documents on the said day, for disinvestment/sale of approximately 90% of HDFC Credila’s total issued and paid-up share capital, to the Acquirers (the “Proposed Transaction”), subject to regulatory approvals and dispensations (including the RBI and Competition Commission of India (“CCI”).”

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In August 2023, the Competition Commission of India (CCI), the antitrust regulatory body, approved the acquisition of a 90 percent equity holding in HDFC Credila by a private equity consortium consisting of BPEA EQT and ChrysCapital.

On June 20 last year, HDFC Ltd disclosed to the exchanges that it had entered into definitive agreements for the potential sale of a 90 percent share in HDFC Credila to a consortium of private equity firms for approximately ₹9,060 crore.

“We further refer to our letters (i) dated July 01, 2023 wherein we had informed that HDFC Limited has been amalgamated with and into HDFC Bank effective July 1, 2023, and accordingly, the entire investment of HDFC Limited in HDFC Credila stood transferred to HDFC Bank with effect from July 1, 2023; and (ii) dated August 09, 2023 wherein we had informed that CCI at its meeting held on August 08, 2023, granted its approval for the Proposed Transaction in terms of Section 31(1) of the Competition Act, 2002," the company informed the exchanges.

As per the agreement terms, HDFC possesses the authority to appoint a single non-executive nominee director to the board of HDFC Credila, under conditions specified in the shareholders’ agreement. Additionally, the company retains customary preemptive rights as outlined in said agreement.

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In April 2022, preceding HDFC Ltd.'s merger with HDFC Bank, the Reserve Bank of India (RBI) mandated HDFC Ltd. to diminish its ownership stake in subsidiary Credila to 10% within a two-year timeframe, refraining from acquiring new customers in the process.