Shinhan Bank Co., Ltd.

Page 1 of 4 COMPETITION COMMISSION OF INDIA Combination Registration No.C-2024/04/1135 28th May 2024 Notice under Section 6(2) of the Competition Act, 2002 filed by Shinhan Bank Co., Ltd. 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 16th April 2024, the Competition Commission of India (Commission) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (Act) filed by Shinhan Bank Co., Ltd. (Shinhan Bank/Acquirer) for the proposed acquisition of stake in HDFC Credila Financial Services Limited (HDFC Credila/Target) [Hereinafter, the Acquirer and Target Entities are collectively referred to as ‘Parties’]. 2. The notice has been filed pursuant to inter alia the Share Subscription Agreement dated 3rd April 2024 executed between the Parties. 3. The proposed combination envisages the acquisition of 10.94% shareholding (on a fully diluted basis) in the Target by the Acquirer by way of the subscription of equity shares of the 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 Combination Registration No. C-2024/04/1135 Page 2 of 4 Commission, vide communication dated 24th April 2024 sought certain information(s)/ clarification(s), inter alia, relating to the activities of the Parties and the response to the same was received on 1st May 2024. 5. The Acquirer is a multinational bank and financial services company headquartered in South Korea. It is part of Shinhan Financial Group (SFG). SFG is a financial holding company in South Korea, which was established on the basis of Shinhan Bank, Shinhan Capital and Shinhan Investment Management. SFG offers diversified financial products and services, such as banking, consumer finance, insurance, asset management, brokerage, and others. Shinhan Bank is active globally. Its businesses comprise investment banking, wealth management, risk management, and corporate and retail banking. Shinhan Bank has limited market presence in India. It entered India in 1996. It currently has six Indian bank branches in Mumbai, Pune, New Delhi, Poonamallee (Karnataka), Ahmedabad and Ranga Reddy (Telangana). 6. The Target is registered with the Reserve Bank of India (RBI) as a non-deposit taking non-banking financial company, classified as NBFC-Middle Layer. It is ultimately owned by entities forming the investment fund BPEA Private Equity Fund VIII, which is an EQT Investment Fund, and is controlled, managed and advised by entities affiliated with EQT AB. HDFC Credila is accordingly part of the EQT group of investment funds, which together with its subsidiaries and funds is a global investment organization. HDFC Credila is primarily engaged in the business of providing education loans to Indians who wish to pursue higher education both in India and overseas. 7. It is submitted in the notice that the Parties are present in the provisions of loans and lending services. HDFC Credila is engaged in the provision of education loans only and Shinhan Bank provides other types of loans but not education loans. Further, the activities of the Parties overlap in the distribution/referral of insurance products and services. Hence, the Acquirer exhibits horizontal overlaps with Target in the market for (i) provisions of loans and lending services in India and (ii) distribution/referral of insurance products and services in India. Combination Registration No. C-2024/04/1135 Page 3 of 4 8. Based on the above, the Parties have submitted that the relevant markets may be defined as 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). The Relevant Market 2 may be further segmented into: (i) market for distribution/referral of life insurance products and services in India (Narrow Relevant Market 1) and (ii) market for distribution/referral of general insurance products and services in India (Narrow Relevant Market 2). [The Relevant Market 1, the Relevant Market 2, the Narrow Relevant Market 1 and Narrow Relevant Market 2, are collectively referred to as the ‘Relevant Markets’]. 9. The Commission decides to leave precise delineation of the relevant market open, as it was observed that because of the reasons stated below, the Proposed Combination is not likely to result in any appreciable adverse effect on competition irrespective of the manner in which the relevant market is delineated. 10. Based on the submissions of the Parties, it is noted that the combined market shares of Parties in each of the Relevant Markets are in the range of [0-5] % only in terms of value. Further, there are other players present in Relevant Market 1 such as State Bank of India (SBI), HDFC Bank, ICICI Bank (ICICI), Punjab National Bank (PNB) and Kotak Mahindra Bank. Likewise, in Relevant Market 2 and its sub-segments the presence of large life insurance providers, large general insurance providers and several life insurance distributors and general insurance distributors in the market, will continue to pose competitive constraints to the Parties post the Proposed Combination. 11. 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 sub-section (4) of Section 20 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 under Section 31(1) of the Act. 12. This order may stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect. Combination Registration No. C-2024/04/1135 Page 4 of 4 13. The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act. 14. The Secretary is directed to communicate to the Acquirer accordingly.