TVS Holdings to acquire 80.74% equity stake in Home Credit India for Rs 554 cr

TVS Holdings Limited has announced that it will acquire a 80.74% equity stake of Home Credit India Finance Private Limited for Rs 554 crores (“Proposed Transaction”) to expand its presence in the consumer finance space. 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.

The latest acquisition aligns with the strategy of TVS Holdings Group to play a leading role in deepening the financial penetration in India, the company said. 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 crore as of March 31, 2024. 
The company said: "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, Sudarshan Venu, Managing Director, TVS Holdings, said: “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.”

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.”

In Q4 FY24, TVS Holdings Ltd's consolidated net profit for the quarter ended March rose 43% YoY to Rs 464 crore. Revenue from operations increased to Rs 10,125 crore from Rs 8,523 crore, of which automotive components accounted for Rs 202 crore, automotive vehicles and parts Rs 8,412 crore and financial services Rs 1,751 crore, the company said in a regulatory filing.

For the full year, net profit rose 24.03% to Rs 338.74 crore in the year ended March 2024 as against Rs 273.11 crore during the previous year ended March 2023. Sales declined 26.29% to Rs 1598.91 crore in the year ended March 2024 as against Rs 2169.30 crore during the previous year ended March 2023.