Credila Financial Services Ltd, previously known as HDFC Credila Financial Services Ltd, has initiated the process for an initial public offering (IPO) by filing pre-draft papers with the Securities and Exchange Board of India (SEBI). The lender, specializing in education loans, made the submission through a confidential pre-filing route, allowing it to withhold detailed public disclosures until later in the process. This development follows a significant change in ownership, with EQT and ChrysCapital acquiring a 90.01% stake in the company. Credila’s robust financial performance and its pivotal role in supporting education financing position it as a promising player in the financial services sector.

IPO Filing Through the Confidential Route

Pre-Filing with SEBI:
Credila filed its pre-draft red herring prospectus (DRHP) with SEBI and stock exchanges for an IPO on the main board. The confidential pre-filing process enables the company to withhold detailed public disclosure of IPO-related information at this stage.

Strategic Move:
The IPO is expected to help Credila raise capital to expand its operations and further strengthen its position in the education loan segment.

Significant Ownership Restructure

Private Equity Consortium Takes Control:
During FY24, a private equity consortium comprising EQT and ChrysCapital acquired a 90.01% stake in Credila for Rs 9,060 crore. This included:

A fresh equity infusion of Rs 2,003.61 crore.
Rs 700 crore contributed by HDFC Ltd in June 2023.
Rs 1,303.61 crore infused by EQT and ChrysCapital in March 2024.
Ownership Breakdown:
As of March 31, 2024, the ownership structure is:

EQT: 72.01%
ChrysCapital: 18%
HDFC Bank: 9.99%
RBI Directive:
The ownership changes followed an RBI directive requiring HDFC Bank to reduce its shareholding in Credila to less than 10% after its merger with HDFC Ltd.

Impressive Financial Performance in FY24

Income and Profit Growth:
Credila demonstrated substantial growth in FY24:

Total Income: Increased to Rs 2,771.04 crore, compared to Rs 1,352.18 crore in FY23.
Profit After Tax: Nearly doubled to Rs 528.84 crore from Rs 275.92 crore in the previous year.
Valuation Details:
The consortium valued Credila at a pre-money valuation of Rs 10,350 crore during the acquisition, reflecting the lender’s strong financial performance and market potential.

Support for Education Financing

Student Loans Since Inception:
Credila has supported over 1.24 lakh students with education loans, underscoring its critical role in enabling access to higher education for Indian students.

Sector Leadership:
The lender’s niche focus on education loans and its consistent growth make it a prominent player in the financial services landscape, particularly in the education financing sector.