Credila Plans to Raise $600 Million in External Borrowings

Credila Financial Services, earlier known as HDFC Credila, is in discussions to raise up to $600 million from overseas lenders following its upcoming IPO, as per the ET report. The loan will be structured under the external commercial borrowing (ECB) route, with DBS, MUFG, and Sumitomo Mitsui Banking Corp (SMBC) among the potential participants. 

As per the report, Marketed at spreads of 135-150 basis points above the secured overnight financing rate (SOFR), the borrowing cost is expected to be around 5.5-6%. The funds will be raised in US dollars at a time when the rupee has already weakened by more than 2% against the dollar in 2025.

Expanding Borrowing Base

Credila, which had previously relied on term loans and non-convertible debentures, has significantly widened its financing sources in recent years. The number of its lending relationships has risen from 19 two years ago to 29 as of March 2025. 

Offshore borrowings, which were absent two years earlier, now account for 18.4% of its total debt. The company filed its draft red herring prospectus on 26 June to raise ₹5,000 crore through its initial public offering, further broadening its capital base.

Ownership and Financial Position

The education loan provider was sold by HDFC in July 2023 to expedite its merger with HDFC Bank. In March 2024, HDFC Bank divested its holding to EQT’s Kopvoorn BV and ChrysCapital entities, making Credila a subsidiary of Kopvoorn, which owned 63.96% as of March 2025. 

According to its draft IPO prospectus, Credila’s average borrowings increased to ₹32,700 crore in FY25 compared with ₹20,067 crore the previous year. This rise also pushed its average cost of debt to 8.85% from 8.63%.

Read More: Upcoming IPO: Credila I Files Draft Paper with SEBI to Raise ₹5,000 Crore!

Conclusion 

Credila, backed by EQT’s Kopvoorn and ChrysCapital, is diversifying its funding sources with offshore borrowings. The $600m ECB plan reflects its expanding debt profile, rising borrowings, and strategic shift post-HDFC merger, as it readies for a ₹5,000 crore IPO.

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