The CCI, on May 28, 2024, approved the acquisition by Shinhan Bank Co., Ltd. (‘Shinhan Bank/Acquirer’) for the purchase of shares in HDFC Credila Financial Services Limited (‘HDFC Credila/Target’) (the Acquirer and the Target are collectively referred to as the ‘Parties’). ^[1]

Description of Transaction and Parties

On April 16, 2024, a Notice was filed by the Acquirer pursuant to, inter alia, a share subscription agreement dated April 3, 2024, entered into between the Parties.

The combination involves the acquisition of a 10.94% shareholding (on a fully diluted basis) in HDFC Credila by Shinhan Bank through a subscription of equity shares (‘Proposed Combination’).

Acquirer: Shinhan Bank is a multinational bank and financial services company headquartered in South Korea and is a part of the Shinhan Financial Group. It operates globally, providing a range of financial products and services, including investment banking, wealth management, risk management, and corporate and retail banking. It has a limited market presence in India, with six branches in various cities.

Target: HDFC Credila is a non-deposit taking NBFC-Middle Layer registered with the Reserve Bank of India. It is a part of the EQT group of investment funds, which is managed by entities affiliated with EQT AB. HDFC Credila primarily provides education loans and is involved in the distribution/referral of insurance products.

Overlaps and Assessment by CCI

Horizontal Overlaps: The CCI assessed the horizontal overlaps between Shinhan Bank and HDFC Credila in the market for provision of loans and lending services in India (‘Relevant Market 1’) and market for distribution/referral of insurance products and services in India (‘Relevant Market 2’). Relevant Market 2 was further segmented into market for distribution/referral of life insurance products and services (‘Narrow Relevant Market 1’) and market for distribution/referral of general insurance products and services (‘Narrow Relevant Market 2’) (collectively referred to as ‘Horizontal Relevant Markets’).

Assessment: The combined market share of the Parties in each the Horizontal Relevant Markets was in the range of 0 – 5% in terms of value. Significant competitors in these markets included State Bank of India, HDFC Bank, ICICI Bank, Punjab National Bank and Kotak Mahindra Bank, as well as major life and general insurance providers and distributors, which will continue to pose competitive constraints post the Proposed Combination.

The CCI concluded that the Proposed Combination is unlikely to result in an appreciable adverse effect on competition in India. Therefore, in the absence of any competition concerns, the CCI approved the Proposed Combination.

[1] Shinhan Bank Co., Ltd./HDFC Credila Financial Services Limited (Combination Registration No. C-2024/04/1135).