HDFC Bank To Sell HDFC Edu To Vama Sundari Investments For Rs 192 Crore

HDFC Bank will sell its wholly owned subsidiary, HDFC Education and Development Services Pvt., to Vama Sundari Investments (Delhi) Pvt. for a cash consideration of Rs 192 crore.

As part of the transaction, HDFC Bank will be offloading 100% of the stake held in HDFC Edu, according to an exchange filing. Out of the total shareholding, 91% would be offloaded before Oct. 31 and the remaining 9% by June 30 next year, it said.

The acquiring entity, Vama Sundari, is a "related party" of HDFC Asset Management Company Ltd., the mutual fund arm of HDFC Bank.

The sale price has been fixed as Rs 9.6 per share for 20 crore shares, aggregating to Rs 192 crore, the filing said.

The sale is pursuant to the RBI letter to the bank dated Apr. 20, 2023, "mandating a full divestment" from HDFC Edu within two years from the merger of HDFC Ltd. into the bank, it added.

For the financial year ended March 31, 2024, HDFC Edu recorded a total income of Rs 18.18 crore and total assets of Rs 197.05 crore.

The disclosure on HDFC Edu's sale was made by HDFC Bank following the market hours. The private lender's shares closed 2.4% lower at Rs 1,617.8 apiece on the NSE, compared to a 0.87% decline in the benchmark Nifty 50.

The stock has declined by 5.35% on a year-to-date basis, and has risen by 6.7% over the past 12 months.

Out of 47 analysts tracking the company, 38 have a "buy" rating on the stock and nine suggest a "hold", as per Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 17.2%.