The Competition Commission of India (CCI) has been approached for approval of a significant amalgamation involving four entities within the Svatantra Group. 

The move is expected to consolidate the group’s financial services offerings and leverage synergies across microfinance and housing finance segments.

The transaction, classified under Section 5(c)(i)(A) of the Competition Act, 2002, seeks to streamline the group’s operations and expand its market presence in India’s microfinance and housing finance sectors.

The proposed amalgamation involves Svatantra Holdings Private Limited (SHPL), a core investment company focused on equity, preference shares, and securities, incorporated in 2018; Svatantra Microfin Private Limited (SMPL), a Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI) providing microfinance and personal loans to rural and semi-urban low-income households; Chaitanya India Fin Credit Private Limited (CIFCPL), another NBFC-MFI offering microfinance and personal loans to similar demographics, with operations registered in Maharashtra; and Svatantra Micro Housing Finance Corporation Limited (SMHFCL), a Housing Finance Company (NBFC-HFC) offering secured housing loans, loans against property, and construction project financing.

The transaction aims to amalgamate SHPL and CIFCPL into SMPL through a board-approved Scheme of Amalgamation. 

Post-amalgamation, SMHFCL will become a wholly owned subsidiary of SMPL. 

The entities operate in overlapping markets, primarily in the provision of loans and lending services across India (broad market) and in the provision of retail loans in India (narrow market). 

The parties argue that the transaction will not disrupt the competitive landscape, emphasizing that it will neither raise competition concerns nor alter market dynamics. They have left the definition of the relevant markets open for CCI’s consideration.

The amalgamation seeks to unify operational frameworks, enhance efficiency, and strengthen the group’s ability to serve low-income households. 

By consolidating their microfinance and housing finance portfolios, Svatantra aims to scale its operations and address the financial inclusion gap in rural and semi-urban areas.

The transaction awaits CCI’s nod, with its approval being critical to achieving the intended structural and operational integration. 

Industry experts suggest that the move aligns with the broader trends of consolidation in India’s financial services sector, driven by the need for efficiency and scale. The outcome of this filing will be closely watched by stakeholders, given the growing importance of financial inclusion initiatives in India’s economic landscape, economy watchers said.