News Column

Aditya Birla PE To Invest In CIBIL

July 27, 2014



Aditya Birla Private Equity is planning to acquire 10% stake in credit information services provider @CIBIL Limited (Cibil) for a consideration of INR 1200 Mn.

With the company planning for an IPO by end of next calendar year, the deal is an pre IPO deal which values the firm commanding 90% market share at INR 12,000 Mn.

The deal would provide ICICI Bank, along with other banks, an exit from the agency.

CIBIL has been in news with US-based consumer credit reporting agency TransUnion International Inc. hiking its stake in the company. The US firm was keen in increasing its stake after government increased the FDI limit in credit information companies to 74% from 49%.

Since March, some early investors in Cibil such as Punjab National Bank, @CentralBankOfIndia, Standard Chartered Bank and @Sundaram_Finance_L had sold their stake in the company to American financial services group TransUnion International Inc, which owns roughly 55% in it now.

Founded in 2000 Credit Information Bureau (India) Limited or CIBIL tracks the credit record of bank customers and commands a 90% market share. CIBIL operates four bureaus consumer, retail, mortgage check and fraud prevention. Currently, the company has a database of 305 million in the consumer bureau and 15 million in retail bureau with 960 members. It was recently planning to set up a credit bureau focused on MFI, whose inclusion would increase the database number by 70 million.

With the NPA's increasing and rising default, banks are now pushing themselves to be more stringent regarding the the credit history of borrowers before disbursement. The central bank has asked the banks to get the history from multiple bureaus.

The gross NPA of 40 listed banks shot up to INR 63,3860 Mn, in the nine months through December to over INR2.4 lakh Cr, according to a study done by NPAsource, an Ahmedabad-based portal with a focus on bad loans.

It was recently planning to set up a credit bureau focused on MFI, whose inclusion would increase the database number by 70 million.






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Source: DealCurry (India)


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