'Open to M&A opportunities that add to HDFC Credila's capabilities' — BPEA EQT's Jimmy Mahtani

Earlier this week, a consortium of BPEA EQT and Chrys Capital sealed the buyout of top education loan provider HDFC Credila for $1.3 bn in India's biggest-ever private equity deal in the financial services segment. In his first interview with Indian media post the landmark deal, Jimmy Mahtani, Head, BPEA EQT India spoke to Moneycontrol's Ashwin Mohan on the road ahead post the Credila gameplan, BPEA EQT's India M&A strategy, opting for the consortium route and more ...

Q. What were the key deal triggers for BPEA EQT when it comes to the HDFC Credila acquisition?

Jimmy Mahtani: This is a landmark deal for BPEA EQT. It’s not only our first investment in India following our combination with EQT, it also marks the largest-ever private equity buyout within India’s financial services sector.

We have been following HDFC Credila closely since 2016 as the company is positioned at the intersection of two of BPEA EQT’s core sectors - education and financial services.

There’s huge demand for high-quality education among India’s young population, and we are both humbled and excited about the opportunity to enable access to academic studies for even more students going forward.

Q. As a buyout fund which has struck deals across multiple sectors, why did BPEA EQT choose to not go solo and partner with ChrysCapital for this deal? What is the split between the two in terms of deal consideration?

A: We like to partner up with like-minded investors. It adds more perspectives, networks and experiences. Similar to BPEA EQT, ChrysCapital has a strong track record within financial services in India.

BPEA EQT will hold a significant majority stake in HDFC Credila.

Q. How does BPEA EQT plan to take HDFC Credila to the next stage of growth? Is an India IPO on the cards?

A: We see a huge opportunity in accelerating HDFC Credila’s digital transformation journey, drawing on EQT’s expertise and in-house capabilities in this field, especially improvements related to UX, operational efficiencies,
data-driven underwriting, and cybersecurity. We also see attractive opportunities in broadening HDFC Credila’s product and services offering into adjacent verticals.

It’s too early to think of potential exit routes. We just signed this investment, right now our focus is on closing the deal so that we can get started on working together with HDFC Credila’s management and partners to kick off the next phase of the company’s growth journey.

Q. Are there any synergies between the existing education portfolio of BPEA EQT namely Nord Anglia Education and IMG Academy and its latest bet HDFC Credila?

A: Definitely. Education is one of BPEA EQT's core sectors, and we have invested more than $4 billion of equity in 12 companies over the course of the past decade. During this period, we have accumulated plenty of operational expertise, insights and networks from having supported our education assets’ growth across Asia, Europe and North America.

Q. Does BPEA EQT expect more consolidation in the Indian education loan segment, and will it participate further in M&A opportunities in the Indian financial services space?

A: We believe HDFC Credila has a long runway for organic growth, and we will infuse Rs 20 billion of primary capital to support this. We will be open to M&A opportunities that add to HDFC Credila’s product and service capabilities.