TVS Holdings, Premji Invest to buy Home Credit India

NEW DELHI: TVS Holdings Ltd on Friday said it will acquire 80.74 per cent stake in Home Credit India Finance Pvt Ltd, with the remaining 19.26 per cent stake to be purchased by Premji Invest and other associates for an overall value of Rs 686 crore.

The total deal is for Rs 686 crore, with TVS Holdings paying Rs 554.06 crore for majority stake of 80.74 per cent, while Premji Invest would hold around 11 per cent stake and the rest with other associates.

The Board of Directors at its meeting held on Friday approved the acquisition of 88,09,45,401 equity shares of Home Credit India Finance Pvt Ltd (HCIFPL), amounting to 80.74 pc stake, from Home Credit India BV, an entity based in the Netherlands and Home Credit International AS, a Czech Republic-based entity, TVS Holdings said in a regulatory filing.

The aggregate consideration for the acquisition of 80.74 per cent stake in Home Credit India Finance is Rs 554.06 crore, it added.

Addressing a virtual conference, TVS Holdings MD Sudarshan Venu said the remaining 19.26 per cent of the equity stake in Home Credit India Finance will be purchased by Premji Invest and other associates. Home Credit India Finance had an Assets under Management (AUM) of Rs 5,535 crore as of March 31, 2024. It focuses on New-to-Credit customers, enabling them with consumer durable loans for low-cost smartphones, along with personal loans.

The company has an employee base of 3,800 and a network of over 50,000 points-of-sale spread across 625 cities. It had clocked a turnover of Rs 1,720 crore in 2022-2023.

On the reasons behind the acquisition, Venu said financial services represent a huge opportunity in India as the country will continue to be the fastest growing large economy for many years and in the next five years is expected to become the world’s third largest economy.

The country’s ‘‘unprecedented growth is being fuelled by the new, confident, and aspirational India, on the back of a world leading digital infrastructure’’, he added.

‘‘Home Credit is a significant player in consumer financing with a lot of potential. Together with TVS Credit, the Group will now have a lending book of Rs 31,000 crore, taking us closer to our book-size goal of Rs 50,000 crore in the next three years,’’ he said.

Collectively, Venu said, ‘’We will now be serving 3 crore financial services customers across more than 90,000 touch points pan India.’’ This acquisition aligns with the strategy of TVS Holdings Ltd to expand in the consumer finance sector, further strengthening its portfolio, the company said.

‘‘HCIFPL will operate as a subsidiary of TVS Holdings Ltd, maintaining its brand identity and autonomy,’’ it said, adding HCIFPL would benefit from the resources and support of TVS Holdings Ltd.

When asked if Home Credit could be merged with TVS Credit going ahead, Venu ruled out such a move in the near future.

Premji Invest managing partner, and chief investment officer, TK Kurien said, ‘‘We are confident this acquisition will help the company accelerate scale and profitability and build significant value for all stakeholders.’’