Background

On September 20, 2023, the CCI approved acquisition of 10.98% stake (fully diluted basis) by PI Opportunities Fund I Scheme II (‘PIOF-II’) acting through its trustee along with Individual Acquirers (collectively ‘Acquirers’) in TVS Credit Services (‘TVS Credit/Target’) (‘Parties’) ^[1]. PIOF-II will be acquiring about 10.79% of shareholding in the Target, whereas the Individual Acquirers will collectively be acquiring 0.19% shareholding in Target (‘Proposed Combination’).

Parties to Combination

Acquirer: PIOF-II is a trust established under the laws of India and registered as a Category II Alternative Investment Fund with the Securities and Exchange Board of India. The Acquirer is managed by PI Investment Advisory LLP, as a delegate of the trustee, Hasham Premji Private Limited. The Acquirer is owned and controlled by Premji Invest Limited (‘Premji Invest’) and is an affiliate of Premji Invest which is the private equity and venture capital investment arm of the Premji Foundation. The Individual Acquirers are senior level management employees, partners, and consultants of Premji Invest and its affiliates and trustees.

Target: TVS Credit is a non-deposit taking Systemically Important Non-Banking Financial Company incorporated in India. It is primarily engaged in providing two-wheeler loans, used car loans, new and used tractor loans, used commercial vehicle loans, MSME loans, consumer durable loans and personal loans in India. TVS Credit does not have any business operations outside India.

Relevant Markets and Overlaps

While the CCI left the exact delineation of the Relevant Markets, it noted their identification by the Parties as follows (‘Relevant Markets’):

i.    the market for provision of loans and lending services in India;

ii.   the market for provision of retail loans in India (which may be further sub segmented into):

iii.  the market for provision of loans to MSMEs in India; and

iv.   the market for provision of personal loans in India.

Competitive Assessment

CCI was of the view that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India in any of the Relevant Market(s) and approved the same basis the following observations:

i.    The combined market shares of the Parties in the Relevant Markets are in the range of zero to five per cent in terms of value; and

ii.    Further, there are other players present in the market such as State Bank of India, Punjab National Bank, HDFC Bank Limited, ICICI Bank Limited and Union Bank of India who will continue to pose competitive constraints to the Parties post the Proposed Combination.

[1] PI Opportunities Fund / TVS Credit Services (Combination Registration No. C-2023/07/1042).