Expecting regulatory approval within a month for Credila sale: Parekh

We need the regulatory approval for Credila's sale from the CCI, said Deepak Parekh.

Housing Development Finance Corporation (HDFC) expects to get regulatory approvals for the sale of its education loan subsidiary HDFC Credila within a month, said Deepak Parekh, Chairman, HDFC Ltd.

"We need the regulatory approval for Credila's sale from the Competition Commission of India (CCI). We hope to get the approval in 15 days to one month," he said.

HDFC Ltd has signed definitive documents for the proposed disinvestment/sale of approximately 90 percent stake in HDFC Credila to a consortium of private equity firms BPEA EQT and ChrysCapital for around Rs 9,060 crore, the lender said in a disclosure to the exchanges on June 20.

On May 22, Moneycontrol was the first to report that a consortium led by Baring PE EQT was the frontrunner to pick up a majority stake of around 90 percent in HDFC Credila. The expected valuation of the deal was around Rs 10,000 crore, the report added.

According to the deal terms, HDFC shall have the right to nominate one non-executive nominee director on the board of HDFC Credila on terms as agreed under the shareholders’ agreement and the firm shall have customary pre-emptive rights under the shareholders’ agreement.

In April 2022, ahead of cHDFC Ltd's merger with HDFC Bank, the RBI had directed HDFC to reduce its stake in subsidiary Credila to 10 percent within two years without onboarding new customers.

Established in 2006, HDFC Credila is India's first dedicated education loan company.