HDFC to take control of Credila

HDFC has proposed to acquire the 9.12 per cent stake it does not already own in education-loan unit HDFC Credila Financial Services for up to Rs. 395 crores in cash. The mortgage lender said in a stock-exchange filing it will buy the stake from Credila founders Ajay and Anil Bohora. The transaction is likely to be completed by end of the calendar year.

HDFC had first acquired a 41 per cent stake in Credila from DSP Merrill Lynch Capital Ltd. in 2009. The stake buy valued the firm at US$5 mn. HDFC raised its stake to 51 per cent a year later and further increased its holding over the years to 90.88 per cent. HDFC Credila, a non-banking financial company, was set up in 2006 and provides loans for higher education. It has branches in major cities including Mumbai, Pune, Kolkata, New Delhi, Bengaluru, and Chennai.

The unit’s revenue increased to Rs. 603.52 crores for the year through March 2019 from Rs. 484.82 crores the year before.

In September, The Economic Times reported that HDFC planned to fully acquire Credila, with an aim to list the education loan firm in a couple of years’ time. With rising education cost and number of students in india, credila surely will havee go growth prospects if listed.Get ready for a bumper IPO soon.