360 ONE Private Equity Fund

Document text

Page 1 of 4 COMPETITION COMMISSION OF INDIA Combination Registration No.C-2024/06/1165 6th August 2024 Notice under Section 6(2) of the Competition Act, 2002 filed by 360 ONE Private Equity Fund 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 27th June 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 360 ONE Private Equity Fund (360 Fund), through its schemes or affiliates, acting through its Investment Manager, 360 ONE Alternates Asset Management Limited (AAML) (360 Fund and AAML collectively referred to as 360 ONE/ Acquirer) in relation to the proposed acquisition of equity shares in Vastu Housing Finance Corporation Limited (VHFCL/ Target) [Hereinafter, the Acquirer and the Target are collectively referred to as the “Parties”]. 2. The notice has been filed pursuant to Share Purchase Agreements and a Shareholders Agreement dated 22nd May 2024, executed amongst various schemes and affiliates of 360 ONE, various sellers (including employees), and VHFCL. Combination Registration No. C-2024/06/1165 Page 2 of 4 3. The proposed combination relates to proposed acquisition of 4.12% shareholding (on a fully diluted basis) of VHFCL by 360 ONE, through its schemes and affiliates (Proposed Combination). This will increase existing shareholding of 360 ONE in VHFCL from 5.44% to 9.56% (on a fully diluted basis). 4. In terms of Regulation 14 of Competition Commission of India (procedure in regard to the transaction of business relating to combinations) Regulations, 2011, communication dated 12th July 2024 was issued to the Acquirer seeking certain information(s)/ clarification(s), inter alia, relating to the activities of the Parties and the response to the same was received on 15th July 2024. 5. 360 Fund is registered with the Securities and Exchange Board of India as a Category II Alternative Investment Fund. It is established for investing in various sectors in India and worldwide. 360 Fund is managed by AAML, its Investment Manager. AAML, incorporated under the Companies Act, 2013, is a wholly owned subsidiary and is ultimately controlled by 360 ONE WAM Limited (360 OWL). It provides investment management services to 360 ONE Group and also undertakes portfolio management services including co-investment portfolio management services. 360 ONE is a wholly owned subsidiary of 360 OWL. It has made financial investments across the world as well as in India in various sectors. It does not undertake any business activities by itself. 6. 360 OWL is the ultimate holding company of the 360 ONE Group, which comprises companies/ portfolio entities1 of 360 OWL (360 ONE Group) that are either based in India and/or derive revenue from India. 7. VHFCL is engaged in the provision of home loans, home extension loans, plot and construction loans, construction loan, loans against property and micro/ MSME loans. VHFCL is the ultimate parent entity of the “Vastu Group”. It has one subsidiary, 1 All entities where 360 ONE Group / Acquirers, directly or indirectly, have: shareholding of 10% or more; or a right or ability to exercise any affirmative voting right (including over any advantage of commercial nature with the portfolio company or its affiliates) that is not available to an ordinary shareholder; or a right or ability to nominate a director or observer (collectively “Materiality Threshold(s)”). Combination Registration No. C-2024/06/1165 Page 3 of 4 namely, Vastu Finserve India Private Limited (VFIPL) [Collectively referred to as “Target Group”]. VHFCL does not have any other investments. 8. VFIPL is a wholly owned subsidiary of VHFCL. VFIPL is a Non-Banking Financial Company (NBFC) engaged in the business of providing financial services specifically, provision of loans and credit/advance money with or without security to any individual, firm, body corporate or any other entity. It provides the following services in India: used car loans, new car loans, used commercial vehicle loans, new commercial vehicle loans, used tractor loans, new tractor loans, used construction equipment loan, new construction equipment loan, loan against property & three- wheeler loan. 9. While VHFCL (along with its wholly owned subsidiary VFIPL) is engaged in the business of providing financial services, specifically, provision of loans and lending services, 360 ONE is also present in the market of loans and lending services through its wholly owned subsidiary 360 ONE Prime Limited and Northern Arc Capital Limited (an investee company of 360 ONE Private Equity Fund). Further, certain portfolio entities of 360 ONE Group are also engaged in the provision of loans and lending services. 10. Thus, the activities of the Acquirer demonstrates horizontal overlaps with the activities of the Target at a broader level in the market for provision of loans in India, at the narrow level in the market for provision of retail loans in India, and at the narrower level in the following markets: (i) provision of home loans in India, (ii) provision of loans against property; (iii) provision of loans to small businesses/ MSMEs; (iv) provision of vehicle loans in India; and (v) provision of commercial vehicle (including tractors and three-wheelers) loans and construction equipment loans in India. 11. 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 appreciable adverse effect on competition, irrespective of the manner in which the relevant market is delineated. Combination Registration No. C-2024/06/1165 Page 4 of 4 12. 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, each of the markets has presence of other players such as State Bank of India (SBI), HDFC Bank, ICICI Bank (ICICI), Axis Bank (Axis), Punjab National Bank (PNB), Bank of Baroda, Cholamandalam Investment and Finance Limited (Cholamandalam), IndusInd Bank, etc. 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 subsection (4) 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 as per the provisions of Section 31(1) of the Act. 14. This order may stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect. 15. The information provided by the Acquirer 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 Acquirer accordingly.