HDFC Bank has approved the complete 100 per cent stake sale of its subsidiary firm HDFC Education and Development Services to a private company for a total of ₹192 crore. The board of India’s top private lender on Monday, October 7, approved the sale to Vama Sundari Investments (Delhi) Private Limited for the successful bidder in the sale process.
“We wish to inform you that the Board of Directors of the Bank has today approved the sale of a 100 per cent stake in HDFC Edu to Vama Sundari Investments (Delhi) Private Limited, being the successful bidder under the sale process,” said HDFC Bank in a regulatory filing to the stock exchanges.
HDFC Education stake sale: Key Metrics
The cost sale at which shares are sold is Rs. 9.60 per share for 20,00,00,000 shares, aggregating to Rs. 192 crore. While HDFC Bank would divest a 91 per cent stake in HDFC Education Services on or before October 31, 2024, the remaining stake would be divested no later than June 30, 2025.
Upon completion of the sale of the remaining nine per cent stake, HDFC Bank will once again make necessary disclosures regarding the applicable provisions of the Listing Regulations. HDFC Bank will divest the 91 per cent stake in HDFC Education on or before October 31, 2024, and the remaining stake will be divested no later than June 30, 2025.
Vama Sundari Investments (Delhi) Private Limited is a related party of HDFC Asset Management Company Ltd – a subsidiary of HDFC Bank. Accordingly, the sale of shares to Vama Sundari would be a related party transaction for the bank. “In compliance with the provisions of the Listing Regulations, prior approval of the Audit Committee of the Bank has been obtained for the said transaction,” said the top private banking major.
The transaction is done at arm’s length. The price discovery was made pursuant to the Swiss challenge process/bid process. The sale of a 100 per cent stake in HDFC Education to Vama Sundari is pursuant to the RBI letter to HDFC Bank dated April 20, 2023, mandating a full divestment from the said entity within two years from the effective date of the merger of e-HDFC Limited with and into HDFC Bank, i.e., on or before June 30, 2025.
“Accordingly, we wish to inform you that HDFC Education will cease to be a subsidiary of HDFC Bank, effective from the date of sale of 91 per cent stake. A separate disclosure on the same would be made in accordance with the applicable regulations,” said HDFC Bank in its statement.
HDFC Education provides services related to schools, higher education, vocational education and training, and supplemental education, including, but not limited to, school management and improvement services. The entity reported a total income of ₹18 crore in FY24. On Monday, shares of HDFC Bank settled 2.24 per cent lower at ₹1,619.65 apiece on the BSE.
