On April 26, 2019, CCI approved the proposed CDPQ Private Equity Asia Pte. Limited’s (‘CDPQ Asia’) acquisition of compulsorily convertible debentures (‘CCDs’) (comprising less than 20% equity shareholding when converted) of ECL Finance Limited (‘ECL’).[1] The transaction also envisaged restructuring of certain businesses of the Edelweiss group housed in the group’s entities, namely, Edelweiss Retail Finance Limited, Edelweiss Housing Finance Limited and Edelweiss Finvest Private Limited (‘EFPL’) (together with ECL the ‘Target Companies’), prior to the proposed acquisition of CCDs by CDPQ Asia.

While CDPQ Asia (wholly owned subsidiary of Caisse de depot et Placement du Québec (‘CDPQ’)) is  engaged in managing funds for pension and insurance plans in Canada, ECL  is a non-banking financial company registered with the RBI offering, inter alia, structured collateralised finance and real estate finance.

In its assessment CCI observed that CDPQ Asia as well as CDPQ did not compete with the Target Companies in India. Although, there was certain competition between CDPQ’s non-controlling portfolio companies and the Target Companies; however, they were unlikely to cause any anti-competitive concerns in the business segments where the Target Companies are present. With respect to potential buyer-supplier level overlaps (on account of CDPQ Asia and EFPL’s common shareholding in Edelweiss Assets Reconstruction Company) CCI noted the insignificant market share of the Target Companies as well as the presence of commercial banks in the broader as well as the narrower market segment of lending services. Accordingly, absent any competition concerns, CCI approved the Proposed Combination.

[1] Combination Registration No. C-2019/03/649