TVS Holdings Ltd on Monday announced the successful completion of its acquisition of an 80.74 per cent equity stake in Home Credit India Finance (Home Credit India) for Rs 554 crore.
The remaining 19.26 per cent of the equity stake has been purchased by Premji Invest and other associates of TVS Holdings.
Following the deal, together with TVS Credit, the group is eyeing a lending book size of Rs 50,000 crore in the next three years, up from Rs 33,000 crore now.
The company said this acquisition aligns seamlessly with TVS Holdings’ mission to strengthen its presence in the financial services sector.
Home Credit India has served over 16 million customers, both online as well as offline. Home Credit India is one of the leading players in the consumer financing market with assets under management (AUM) of Rs 5,535 crore as of March 2024. It has an employee base of 3,800 and a strong network of over 50,000 points-of-sale (PoS) spread over 625 cities across India. It focuses on New-to-Credit (NTC) customers, enabling them with consumer durable loans for low-cost smartphones, along with personal loans. Home Credit India will significantly complement TVS Holdings’ existing capabilities, enabling it to offer enhanced financial solutions to a wider audience, the company said in a statement.
“This acquisition aligns with the strategy of TVS Holdings Group to play a leading role in deepening the financial penetration in India. Given the Group’s strength in financial services, there are several areas of synergies to be realised, including collections, cost efficiencies, in-house digital and analytics capabilities, and cross-sell,” it added.
“The acquisition of Home Credit India marks an important milestone for TVS Holdings. We are thrilled to welcome Home Credit India’s talented team and huge customer base of 16 million customers to the TVS family. This transaction underscores our commitment to delivering innovative and inclusive financial solutions. Together with TVS Credit, the Group will now have a lending book of Rs 33,000 crore, taking us closer to our book-size goal of Rs 50,000 crore in the next three years,” said Sudarshan Venu, managing director, TVS Holdings.
The company’s investment in real estate business was sold earlier considering its capital-intensive nature and high gestation period of the projects. The board felt that the proceeds received from sale of real estate business can be more productively deployed in other core investment strategy of the company. Accordingly, the acquisition of Home Credit was funded through a combination of the proceeds from the recent sale of the company’s real estate assets and borrowings from capital markets, ensuring prudent financial management and capital utilisation by TVS Holdings. By leveraging the sale proceeds of the real estate assets, TVS Holdings has maintained its strong financial position while expanding into a high-growth industry.
