TVS Holdings To Acquire 80.74% Stake In Home Credit India For $66 Mln

TVS Holdings Ltd. said its board approved the acquisition of an 80.74% stake in Home Credit India Finance Private Ltd. for 554 crore rupees ($66 million) to boost its presence in the consumer finance space.

Home Credit India is the local arm of Czech Republic-based global consumer finance provider Home Credit Group, TVS Holdings said in a stock exchange announcement. The acquisition aligns with the group’s strategy to play a leading role in deepening the financial penetration in India, it added.

The remaining 19.26% stake of Home Credit India will be purchased by Premji Invest and other associates. Premji Invest also owns stake in TVS Credit, a part of TVS Holdings.

The Chennai-based company said Home Credit India will operate as a subsidiary of TVS Holdings, maintaining its brand identity and focus on its unique customer segment, while benefiting from the resources and support of the group.

DEAL LOGIC

The company said Home Credit Group entered the Indian market in 2012 and since then, it has served over 1.6 crore customers in India, both online as well as offline. Home Credit India is one of the leading players in the consumer financing market and had assets under management of 5,535 crore rupees as of 31 March 2024, it added.

Home Credit India has an employee base of 3,800 and a strong network of over 50,000 points-of-sale spread over 625 cities across India, according to the statement. It focuses on new-to-credit customers, enabling them with consumer durable loans for low-cost smartphones, along with personal loans.

TVS Holdings said the acquisition offers several areas of synergies, including collections, cost efficiencies, in-house digital & analytics capabilities and cross-selling, given the group’s strength in financial services.

MANAGEMENT TALK

Sudarshan Venu, managing director of TVS Holdings, said financial services represent a huge opportunity amid India’s expected growth in the coming years.

“Together with TVS Credit, the group will now have a lending book of 31,000 crore rupees, taking us closer to our book-size goal of 50,000 crore rupees in the next three years,” he added.

Venu said collectively, the group will now serve three crore financial services customers across more than 90,000 touch points in India.

"As an existing shareholder in TVS Credit, we are delighted to partner with TVS Holdings in the Home Credit India acquisition,” Premji Invest’s Managing Partner and Chief Investment Officer T.K. Kurien said. “We are confident that this acquisition will help the company accelerate scale and profitability and build significant value for all stakeholders.”

TVS Holdings, formerly known as Sundaram Clayton Ltd., said the deal is subject to approvals from the Competition Commission of India and the Reserve Bank of India.

Note: $1 = 83.5213 Indian rupees

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