HDFC Bank wants to use the Swiss Challenge procedure to sell all of its shares in HDFC Education

By using the Swiss challenge procedure, private lender HDFC Bank hopes to sell all of its shares in HDFC Education and Development Services. The bank said that it is in the midst of confirming the buyer.

In a regulatory filing, HDFC Bank declared that it had signed a legally binding term sheet with a potential participant. This would act as the basic offer for the bank to solicit counter bids from other potential participants in the Swiss challenge procedure.

Prior to the effective date of the composite scheme of amalgamation for the amalgamation of (i) HDFC Investments Limited and HDFC Holdings Limited, wholly owned subsidiaries of HDFC Limited, with and into HDFC Limited and (ii) HDFC Limited with and into HDFC Bank, HDFC Bank had stated in an earlier notification dated April 21, 2023, that the RBI had approved the private lender to maintain the stake of the former HDFC Limited in HDFC Education for a period of two years.

“HDFC Bank has decided to undertake the sale of its 100% stake in HDFC Edu. using the Swiss challenge method in furtherance of the aforesaid RBI direction, after due deliberation, and in the interests of maintaining transparency in the proposed divestment,” the bank said in the exchange filing.

Following the conclusion of the Swiss challenge procedure, HDFC Bank will confirm the buyer. The buyer and the Bank will then sign final documents for the intended transaction.

It said, “Upon execution of such definitive documentation, the details of the definitive documentation for the purposes of the proposed transaction which are required to be disclosed in light of the aforesaid regulations shall be submitted.”