Platinum Owl C 2018 RSC Limited — Combination C-2022/06/945

Notice under Section 6(2) of the Competition Act, 2002 given by Platinum Owl C 2018 RSC Limited

CORAM:

Mr. Ashok Kumar Gupta Chairperson Ms. Sangeeta Verma Member Mr. Bhagwant Singh Bishnoi Member

Order under Section 31(1) of the Competition Act, 2002

1. On 23rd June 2022, the Competition Commission of India (Commission) received a notice (Notice) under Section 6(2) of the Competition Act, 2002 (Act), given by Platinum Owl C 2018 RSC Limited (Platinum Owl/Acquirer), acting in its capacity as trustee of Platinum Jasmine A 2018 Trust (Platinum Jasmine Trust, together referred to as Platinum Investor), for the proposed subscription/acquisition of 20% of the issued and paid-up equity share capital of IIFL Home Finance Limited (IIFL Home/Target) on a fully diluted basis (Proposed Combination). [Hereinafter Platinum Investor and IIFL Home are collectively referred to as Parties].

2. The notice was given pursuant to the Share Subscription Agreement (SSA) dated 9th June 2022, executed between IIFL Home and Platinum Owl; and Shareholders’ Agreement (SHA) dated 9th June 2022, executed between IIFL Home, IIFL Finance Limited (IIFL Finance) and Platinum Owl. Platinum Owl will acquire certain rights in IIFL Home which, inter alia, include right to nominate a director and a non-voting observer on the board of IIFL Home.

3. The Commission, vide its communication dated 11th July 2022, issued under Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, sought certain information(s)/clarification(s), inter alia, relating to the overlaps, products and services, etc. The response to the same was submitted by the Acquirer on 14th July 2022. Further, the Acquirer submitted certain additional information on 22nd July 2022.

4. Platinum Owl is a private limited company, incorporated in the Abu Dhabi Global Market (ADGM). Platinum Owl is acting in its capacity as trustee for Platinum Jasmine Trust, which was established under the laws of ADGM by deed of settlement dated 27th January 2019. The Abu Dhabi Investment Authority (ADIA) is the sole beneficiary and settlor of the Platinum Jasmine Trust.

5. ADIA is a public institution established as an independent investment institution by the Emirate of Abu Dhabi. It manages a global investment portfolio across more than two dozen asset classes and sub-categories, including developed equities, emerging market equities, small cap equities, government bonds, credit, fixed income, real estate, infrastructure, private equity, cash and alternatives.

6. ADIA has an investment of certain equity shareholding in KKR India Financial Services Private Limited (KIFS) through KKR India Financial Investments Pte. Ltd. (KIFL), an entity based in Singapore which, in turn, holds a 99.33% shareholding in KKR Capital Markets India Private Limited (KCM).

7. The Acquirer vide additional submission dated 22nd July 2022, has submitted that KCM and KIFS, are contemplating a merger with a third party, namely, InCred Financial Services Limited (InCred), through one of its promoter companies, Bee Finance Limited (BFL) (InCred Merger). It has been clarified that InCred is not an affiliate of ADIA, and InCred Merger is not inter-connected with or inter-related to the Proposed Combination.

8. IIFL Home is a housing finance company registered with the National Housing Bank (NHB). It is a wholly owned subsidiary of IIFL Finance and belongs to the IIFL Finance group. It is engaged in providing loans for purchase, construction and renovation of homes; secured loans to small and medium enterprise for business; and construction finance loans to builders and developers engaged in construction of affordable homes. The details of the subsidiaries/affiliates of IIFL Home are set out below:

i. IIHFL Sales Limited (IIHFL Sales): It is the wholly owned subsidiary of IIFL Home. It provides professional/ consultancy services that include sourcing, marketing, promoting, publicizing, advertising, brand building, selling and distributing, and servicing any kind of financial products or financial instruments or all classes of insurance products or investment products or wealth products.

ii. IIFL Samasta Finance Limited (Samasta) (formerly known as Samasta Microfinance Limited): IIFL Home holds 25% stake in Samasta. It is a micro finance institution that provides affordable financial loans to the underserved sections of society, especially women belonging to rural and semi-urban areas in India. It has been submitted that IIFL Home will sell its entire shareholding in Samasta (i.e., 25%) to IIFL Finance prior to the closing of the Proposed Combination.

9. Based on the submissions, it is observed that products/services offered by KIFS and InCred (including their subsidiaries/affiliates) on one hand, and IIFL Home (including their subsidiaries/affiliates) on the other, exhibit horizontal overlaps in broad markets for loans and lending services in India.

10. Within the broad market for loans and lending services, Parties exhibit overlaps in the segments of retail loans and wholesale loans. In the segment of retail loans, these entities exhibit overlaps in: (a) home loans and (b) loan against property. In the segment of wholesale loans, these entities exhibit overlaps only in commercial real estate loans (construction finance loans).

11. The precise delineation of the relevant market is left open as it was observed that the Proposed Combination is not likely to cause any appreciable adverse effect on competition in any of the relevant markets.

12. The combined market share of the Parties in all the segments/sub-segments is in the range of [0–5%] and the incremental market share is insignificant.

13. Considering the material on record, including the details provided in the notice and the assessment of the Proposed Combination based on factors stated in Section 20(4) 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 hereby approves the Proposed Combination under Section 31(1) of the Act.

14. This order may be revoked if, at any time, the information provided by the notifying parties is found to be incorrect.

15. The information provided by the notifying parties 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 notifying parties accordingly.