TVS Holdings to Acquire 80.74% Stake in Home Credit India

On May 10, 2024, TVS Holdings Limited informed the exchanges that the company’s board approved the acquisition of an 80.74% equity stake of Home Credit India Finance Private Limited (Home Credit India) for ₹554 crore (proposed transaction). The remaining 19.26% of the equity stake will be bought by Premji Invest and other associates.

After signing a Sale and Purchase Agreement, TVS Holdings and Home Credit will seek approvals from the Reserve Bank of India and the Competition Commission of India for the Proposed Transaction.

Home Credit India is part of the Home Credit Group, an international consumer finance provider operating in several countries worldwide. Home Credit Group started operations in India in 2012. Since then, the company has served more than 1.6 crore customers in India. It offers its services online and offline.

As of March 31, 2024, Home Credit had Assets under Management (AUM) of approximately ₹5,535 crore. The company has a strong network of more than 50,000 points-of-sale (PoS) spread over 625 cities nationwide. It concentrates on New-to-Credit (NTC) customers, helping them with Consumer durable loans for low-cost smartphones and personal loans.

This acquisition aligns with TVS Holdings Group’s strategy to enhance financial penetration in India. Leveraging its financial services expertise, Home Credit Group anticipates collaboration in collections, digital capabilities, cost efficiencies, cross-selling and analytics. Home Credit will operate as a TVS Holdings subsidiary, retaining its brand identity and customer focus while gaining support from the Group’s resources.

Sharing his thoughts on the development of the Proposed Transaction, the Managing Director of TVS Holdings, Sudarshan Venu, said. “India 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. This unprecedented growth is being fuelled by the new, confident, and aspirational India on the back of a world-leading digital infrastructure. Financial services represent a huge opportunity as this growth unfolds.”

He also 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 ~₹31,000 crore, taking us closer to our book-size goal of ₹50,000 crore in the next three years. Collectively, we will now be serving 3 crore financial services customers across more than 90,000 touchpoints pan India.”

CEO of Home Credit Group, Radek Pluhar, said, “Home Credit India is a longstanding member of the Home Credit family. Since launching in the market over a decade ago, we have served millions of Indian customers and empowered local consumers with our innovative and responsible financial products. In addition, we have engaged millions of Indians nationwide to help improve their financial literacy.”

The Managing Partner and Chief Investment Officer of Premji Invest, TK Kurien, stated that as a current shareholder in TVS Credit, they are eager to partner with TVS Holdings in the Home Credit India acquisition.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.