1. JM Financial Limited  2. JM Financial Credit Solutions Limited

Page 1 of 5 COMPETITION COMMISSION OF INDIA Combination Registration No. C-2024/08/1177 8th October 2024 Notice under Section 6(2) of the Competition Act, 2002 given by JM Financial Limited and JM Financial Credit Solutions Limited CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 31(1) of the Competition Act, 2002 1. On 21st August 2024, the Competition Commission of India (Commission) received a Notice under Section 6(2) of the Competition Act, 2002 (Act) given by JM Financial Limited (JMFL) and JM Financial Credit Solutions Limited (JMFCSL) [Hereinafter, JMFL and JMFCSL are collectively referred to as Notifying Parties]. The Notice was filed pursuant to the execution of (i) Share Purchase Agreement, dated 6th July 2024, executed between JMFL and INH Mauritius 1 (Seller) (JMFCSL SPA); and (ii) Share Purchase Agreement, dated 6th July 2024, executed between JMFL and JMFCSL (JMFARC SPA). 2. The Proposed Combination envisages two simultaneous acquisitions, in the manner detailed below – (i) Acquisition of up to 48.96% of the total paid up share capital of JMFCSL, on a fully diluted basis, by JMFL from the Seller (JMFCSL Acquisition); and Combination Registration Number: C-2024/08/1177 Page 2 of 5 (ii) Acquisition of 71.79% of the total paid up share capital of JM Financial Asset Reconstruction Company Limited (JMFARC), by JMFCSL from JMFL (JMFARC Acquisition) 3. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of Business relating to Combinations) Regulations, 2011 (Combination Regulations, 2011), vide letter dated 4th September 2024, certain information and clarifications were sought from the Notifying Parties. The response to this letter was submitted by the Notifying Parties on 14th September 2024, after seeking short extension of time. The Notifying Parties also submitted certain additional information through voluntary submission dated 24th September 2024. 4. As regards the JMFCSL Acquisition, it is observed that JMFL and the Seller have entered into the JMFCSL SPA for acquisition of 42.99% shareholding of JMFCSL only (Tranche 1) and the remaining 5.97% shareholding of the Seller in JMFCSL is proposed to be bought out within the next 12 months by JMFL (Tranche 2). Further, the binding document for Tranche 2 was not executed at the time of filing of the Notice. JMFL has submitted that the rationale for including Tranche 2 as a part of the Proposed Combination is that the board resolution dated 13th August 2024 envisage acquisition of 48.96% of JMFCSL by JMFL. However, given that only Tranche 1 is being consummated in the foreseeable future, the Commission has considered only Tranche 1 of the JMFCSL acquisition, along with the JMFARC Acquisition, within the scope of the Proposed Combination. 5. JMFL is an operating cum holding company of the JMFL Group, that provides integrated and diversified financial services on its own and through its subsidiaries. JMFL’s primary business includes investment banking business, private equity fund management, along with undertaking operations of private wealth and portfolio management services. 6. JMFL through its subsidiaries has interest in (i) integrated investment bank catering to institutional, corporate, government and ultra-high net worth clients and includes business services such as investment banking, institutional equities and research, Combination Registration Number: C-2024/08/1177 Page 3 of 5 private equity funds, fixed income, private wealth management, portfolio management services, syndication and finance; (ii) mortgage lending including both wholesale mortgage lending (primarily catering to real estate developers) and retail mortgage lending (home loans and secured Micro, Small & Medium Enterprises loans); (iii) alternative and distressed credit including the asset reconstruction business and alternative credit funds; and (iv) asset management, wealth management and securities business providing an integrated investment platform to individual clients and includes elite and retail wealth management business, broking and mutual fund business. 7. JMFCSL, a subsidiary of JMFL, is a systemically important non-deposit taking Non- Banking Finance Company (NBFC) and is classified as an investment and credit company, categorized as middle layer NBFC, registered with the Reserve Bank of India (RBI). It is currently engaged in wholesale lending activities with primary focus on real estate financing and corporate financing. 8. JMFARC, a subsidiary of JMFL and a part of the JMFL Group, is an Asset Reconstruction Company (ARC), registered with the RBI, under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It is engaged in the business of acquisition of stressed assets from banks / financial institutions and implementing resolution strategies for the acquired assets. Stressed assets are acquired by JMFARC through one or more trust, exclusively set up for this purpose. As on date, JMFARC operates approximately 60 such trusts [Hereinafter, JMFL, JMFCSL, JMFARC and JMFL Group are collectively referred to as Parties]. 9. For the purpose of overlap assessment, the activities of the JMFL, JMFCSL, JMFARC and JMFL Group (including their affiliates) have been considered. The Notifying Parties have submitted that competition overlaps have been mapped at two levels: (a) JMFCSL Acquisition: Between activities of JMFL and JMFL’s affiliates (excluding JMFCSL and JMFARC) on one hand and JMFCSL on the other; and (b) JMFARC Acquisition: Between activities of JMFCSL and its affiliates (including JMFL’s affiliates) on one hand and JMFARC on the other. Combination Registration Number: C-2024/08/1177 Page 4 of 5 10. Considering the activities of the Parties, the Commission observed that the presence of the Parties primarily overlaps in the provision of loans and lending services market. Two of JMFL’s affiliates i.e., JM Financial Products Limited (JMFPL) and JM Financial India Trust II through its portfolio entity, namely, India Home Loans Limited (IHLL), exhibit horizontal overlap with JMFCSL’s activities in the broad market for provision of loans and lending services. Within the broad market for the provision of loans/lending services, these enterprises exhibit overlaps in the narrow segment of wholesale loans, and subsequently the narrowest sub-segments of (i) construction finance (including project finance)/real estate loans, and (ii) corporate loans. 11. The Commission observed that, considering the nature and extent of aforesaid overlaps and the competition assessment given in the subsequent paragraph, the Proposed Combination is not likely to cause a significant change in competition dynamics in any of the plausible markets that could be delineated and accordingly, decided to keep the definition of relevant market open. 12. The combined market share of the Parties (including their affiliates) in each of the overlapping market segment, on the basis of total value of outstanding loans, is in the range of [0-5]% with an increment of less than 1%. Further, the market segments are fragmented with the presence of other competitors in the market segments that have been analysed. Therefore, given the miniscule presence of the Parties, they do not seem to possess the ability or incentive to cause foreclosure in any of these markets. 13. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination, i.e. Tranche 1 of the JMFCSL Acquisition and the JMFARC Acquisition, under Section 31(1) of the Act. 14. The order may be revoked if, at any time, the information provided by the Notifying Parties is found to be incorrect.