TVS Holdings announces its plan to acquire 80.74% stake in Home Credit India Finance

TVS Holdings Ltd has recently announced its plan to acquire a significant 80.74% stake in Home Credit India Finance Pvt. Ltd, a Gurugram-based non-banking financial institution, for a sum of ₹554 crore. Additionally, Premji Invest and its associates are set to procure the remaining 19.26% equity for ₹132 crore, as per a company statement. The completion of this transaction is contingent upon approvals from both the Competition Commission of India and the Reserve Bank of India.

JM Financial served as the financial advisor to Home Credit India Finance, while Khaitan & Co. provided legal counsel for the deal. The board of directors, in a meeting held recently, approved the acquisition of 880.9 million shares of Home Credit India Finance from Home Credit India B.V and Home Credit International A.S.

Home Credit India, established in 1997 in the Czech Republic and headquartered in the Netherlands, is part of the global Home Credit Group. It boasts assets under management (AUM) totaling ₹5535 crore and serves a customer base of 1.6 crore, both online and offline. The institution specializes in providing personal and consumer durable loans to new-to-credit customers and operates through a vast network of over 50,000 points-of-sale across more than 625 cities in India.

According to Sudarshan Venu, managing director of TVS Holdings, the acquisition aligns with the company's strategic focus on expanding its presence in the financial services sector. Venu emphasized the significant growth potential in financial services, particularly given India's evolving consumption and investment landscape.

TVS Holdings, which already holds a substantial stake in another NBFC, TV Credit, with an AUM of ₹25,900 crore, aims to capitalize on synergies between the two entities. However, Venu clarified that there are no immediate plans for a merger, as Home Credit's focus on new-to-credit customers and its strong distribution network complement TVS Credit's existing business lines, which primarily include two-wheeler, consumer, and gold loans.

Looking ahead, Venu expressed optimism about leveraging synergies in areas such as collections, digitalization, and technology infrastructure, while also exploring cross-selling opportunities between the two entities' product portfolios. He envisions a combined book of ₹50,000 crore within the next three years, building upon TVS Holdings' current book of ₹32,000 crore.