TVS Holdings to acquire Home Credit India and expand its presence in the consumer finance space

TVS Holdings Limited (BSE: [520056], NSE: [TVSHLTD]) (“TVS Holdings”) has announced that the Board of Directors of TVS Holdings Limited has approved the acquisition of a 80.74% equity stake of Home Credit India Finance Private Limited (“Home Credit India”) for Rs 554 Crores (“Proposed Transaction”). The remaining 19.26% of the equity stake will be purchased by Premji Invest and other associates. Upon signing of a Sale and Purchase Agreement, TVS Holdings and Home Credit shall proceed to obtain approvals from the Competition Commission of India and the Reserve Bank of India, respectively, for the Proposed Transaction.

Home Credit India is a part of the Home Credit Group, an international consumer finance provider which was founded in 1997 and has operations in multiple countries. Home Credit Group entered the Indian market in 2012. Since then, Home Credit has served over 1.6 crore customers in India, both online as well as offline.  Home Credit is one of the leading players in the consumer financing market and had an Assets under Management (AUM) of ~Rs 5,535 Cr. as of March 31, 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.

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 realized, including, collections, cost efficiencies, in-house digital and analytics capabilities, and cross-sell. Home Credit 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 TVS Holdings Group.

Commenting on the development of the Proposed Transaction, Sudarshan Venu, Managing Director, TVS Holdings said. “India will continue to be the fastest growing large economy for many years and in the next five years is expected to become the world’s third largest economy. This unprecedented growth is being fuelled by the new, confident, and aspirational India, on the back of a world leading digital infrastructure. Financial services represent a huge opportunity as this growth unfolds. Home Credit is a significant player in consumer financing with a lot of potential. Together with TVS Credit, the Group will now have a lending book of ~Rs 31,000 Crore, taking us closer to our book-size goal of Rs. 50,000 Cr in the next three years. Collectively, we will now be serving 3 crore financial services customers across more than 90,000 touch points pan India.”

Commenting on the Proposed Transaction, Radek Pluhar, CEO Home Credit Group said: “Home Credit India is a longstanding member of the Home Credit family. Since launching in the market over a decade ago, we have served millions of Indian customers and empowered local consumers with our innovative and responsible financial products. In addition, we have engaged millions of Indians nationwide to help improve their financial literacy.”

“As an existing shareholder in TVS Credit, we are delighted to partner with TVS Holdings in the Home Credit India acquisition. We are confident that this acquisition will help the company accelerate scale and profitability and build significant value for all stakeholders,” said TK Kurien, Managing Partner, and Chief Investment Officer, Premji Invest.