For up to $1.5 billion, Baring EQT will purchase Credila, HDFC's education lending division

29 May 2023 , 11:13 AM

According to news reports, Baring Private Equity Asia (BPEA) EQT will outbid rival private equity firms like Carlyle, TA Associates, Blackstone, and CVC Capital to acquire Credila Financial Services, the educational loan division of Housing Development Finance Corp (HDFC), for $1.3 billion to $1.5 billion (Rs 10,000 crore to Rs 12,000 crore).

With the housing financing company holding a 10% stake that it may sell over a two-year period, the buyout fund will acquire 90% of the business.

Prior to the massive merger between HDFC Bank and HDFC to create the fourth-largest bank in the world, a formal announcement is anticipated by the end of June. According to the aforementioned news reports, both sides are finishing up the legal paperwork.

Earlier this year, HDFC engaged Jefferies to begin a formal sale process. It attempted to sell a minority 10-15% ownership in Credila in the past at least three times, but those bids were unsuccessful.

BPEA EQT, which underwent a $7.5 billion merger in 2022, rose to the position of the third-largest private equity fund group globally. For its most recent fund, BPEA Fund VIII, which focuses on buyouts in Asia, BPEA raised $11.2 billion in the same year.

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