PI Opportunities Fund I – Scheme II (“PIOF-II”) along with certain Individual Acquirers

Page 1 of 4 COMPETITION COMMISSION OF INDIA (Combination Registration No.C-2023/07/1042) 20th September 2023 Notice under Section 6(2) of the Competition Act, 2002 filed by PI Opportunities Fund I – Scheme II along with certain Individual Acquirers. CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Order under Section 31(1) of the Competition Act, 2002 1. On 28th July 2023, the Competition Commission of India (Commission) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (Act) filed by PI Opportunities Fund I – Scheme II (PIOF-II/Acquirer) acting through its trustee, namely, Hasham Premji Private Limited, along with certain ‘Individual Acquirers’, namely, Mr. Lakshminarayana Kollengode, Mr. Tekkethalakal Kurien Kurien, Mr. Pramit Jhaveri, Mr. Saravanan Nattanmai, Mr. Manoj Jaiswal, Mr. Vinayan Nambiar, Mr. Rajeev Eyunni, Mr. Ajitesh Nair, Mr. Mukeeta Jhaveri and Mr. Srividya Nambiar [PIOF- II and Individual Acquirers are collectively referred to as ‘Acquirers’] for the proposed acquisition of stake in TVS Credit Services Limited (TVS Credit/Target) [Hereinafter, the Acquirers and Target are collectively referred to as ‘Parties’]. 2. The notice has been filed pursuant to the (i) Share Purchase Agreement dated 9th June 2023 entered into between PIOF-II, TVS Motor Foundation and TVS Credit (TVS Motor SPA); (ii) Combination Registration No. C-2023/07/1042 Page 2 of 4 Amendment to the TVS Motor SPA dated 26th July 2023 entered into between PIOF-II, TVS Motor Foundation, TVS Credit and Individual Acquirers; (iii) Securities Subscription Agreement dated 9th June 2023 entered into between PIOF-II, TVS Motor Company Limited and TVS Credit; (iv) Share Purchase Agreement dated 9th June 2023 entered into between PIOF-II, Sundaram Clayton Limited and TVS Credit; (v) Share Purchase Agreement dated 12th July 2023 entered into between PIOF-II, Sundaram Clayton Limited, Phi Capital Services LLP and TVS Credit; (vi) Share Purchase Agreement dated 26th July 2023 entered into between PIOF-II, TVS Motor Company Limited and TVS Credit; and (vii) Shareholders Agreement dated 9th June 2023 entered into between TVS Credit, TVS Motor Company Limited and PIOF- II. 3. The proposed combination envisages the acquisition of 10.98% stake (on a fully diluted basis) of Target by the Acquirers. PIOF-II shall be acquiring about 10.79% of shareholding in the Target, whereas the Individual Acquirers shall collectively be acquiring 0.19% shareholding in Target [Proposed Combination]. 4. In terms of Regulation 14 of Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, the Commission, vide communications dated 10.08.2023 and 31.08.2023, sought certain information(s)/ clarification(s), inter alia, relating to the activities of the Parties and the response to the same was received on 25.08.2023 and 05.09.2023. 5. The Acquirer 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 Premji Foundation was set up to advance the philanthropic initiatives of Premji Invest and is ultimately controlled by Mr. Azim Premji. The investment objective of the Acquirer is to invest in growth and development stage investments in companies. Combination Registration No. C-2023/07/1042 Page 3 of 4 6. The Individual Acquirers are senior level management employees, partners and consultants of Premji Invest and its affiliates and trustees. 7. The Target is a non-deposit taking Systemically Important Non-Banking Financial Company incorporated in India. The Target 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. 8. It is submitted by the Parties with respect to Individual Acquirers that they do not belong to any specific group. Further, the Individual Acquirers do not have control over any other enterprise and are not members on the board of any other enterprise that operates in a market that may be horizontally, vertically or complementarily linked to the operations of the Target. 9. It is submitted in the notice that the Parties do not directly exhibit any overlaps. However, the operations of certain PI Portfolio Entities1 overlap with the business activities of the Target at the broad level, in the market for provision of loans and lending services, and, at the narrow level, in the market for provision of retail loans. At the narrowest level, the activities of certain PI Portfolio Entities overlap with the activities of the Target in the narrowest sub-segments of market for provision of MSME loans, and the market for provision of personal loans. 10. Based on the above, the Parties have submitted that the relevant markets may be defined as: (i) the market for provision of loans and lending services in India (Loans Market/ Broad Relevant Market); (ii) the market for provision of retail loans in India (Retail Loans Market/ Narrow Market), which may further be segmented as: (a) the market for provision of loans to MSMEs in India (MSME Loans Market/ Narrowest Relevant Market 1); and (b) the market for provision of personal loans in India (Personal Loans Market/ Narrowest Relevant Market 2) [The Narrowest Relevant Market 1 and Narrowest Relevant Market 2 are collectively referred to as the ‘Narrowest Markets’. Further, the Broad Relevant Market, the Narrow Relevant Market, and the Narrowest Relevant Markets are collectively referred to as the ‘Relevant Markets’]. 1 Entities where the Premji Invest Group holds 5% or more shareholding Combination Registration No. C-2023/07/1042 Page 4 of 4 11. The Commission decided to assess the Proposed Combination in the relevant markets identified by the Parties in the notice. However, exact delineation of the relevant markets is being left open. 12. Based on the submissions of the Parties, it is noted that the combined market shares of the Parties in the Relevant Markets are in the range of [0-5] % in terms of value. 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. 13. Considering the material on record, including details provided in the notice given under sub- section (2) of Section 6 of the Act and assessment of the combination based on the factors stated in sub-section (4) of Section 20 of the Act, the Commission is of the opinion 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 therefore, the Commission approves the same under Section 31(1) of the Act. 14. This order may stand revoked if, at any time, the information provided by the Acquirers is found to be incorrect. 15. The information provided by the Acquirers shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act. 16. The Secretary is directed to communicate to the Acquirers accordingly.