Competition Commission of India Approves Acquisition by Multiples GIFT Fund

The transaction will be carried out through the Multiples GIFT Fund, a newly incorporated trust, established under the Indian Trusts Act, 1882.

The Competition Commission of India (CCI) has granted its approval for the acquisition of shareholdings in three prominent companies — Vastu Housing Finance Corporation Limited, APAC Financial Services Limited, and Quantiphi, Inc — by the Multiples Plenty Private Equity GIFT Fund. This move involves significant changes in the shareholding structure of these companies, currently held by various funds under the Multiples Group, and signals the growing interest of private equity in the financial and technology sectors in India.

Overview of the Proposed Acquisition

The proposed acquisition will see the Multiples Plenty Private Equity GIFT Fund (Multiples GIFT Fund/Acquirer) acquire certain shares in:

1. Vastu Housing Finance Corporation Limited (Vastu) - A housing finance company that provides retail loans, such as home loans and loans for small and medium enterprises (MSMEs). Vastu is also involved in providing auto loans and loans against property through its subsidiary, Vastu Finserve India Private Limited.

2. APAC Financial Services Limited (APAC) - A Nonbanking Financial Company (NBFC) that is registered as a Middle Layer entity with the Reserve Bank of India (RBI) since February 2018. APAC is focused on providing retail loans specifically to MSMEs, helping drive financial inclusion in this crucial sector of the economy.

3. Quantiphi, Inc. (Quantiphi) - A technology company based in the United States, engaged in the development and provision of cutting-edge artificial intelligence (AI) and machine learning solutions. Additionally, the company specializes in data analytics. Quantiphi operates in India through its subsidiary, Quantiphi Analytics Solutions Private Limited, and has established itself as a leader in AI solutions for diverse industries.

The transaction will be carried out through the Multiples GIFT Fund, a newly incorporated trust, established under the Indian Trusts Act, 1882. The trust is registered with the International Financial Services Centres Authority (IFSCA) as a Restricted Scheme, and its management will be handled by Multiples Asset Management IFSC LLP, a limited liability partnership (LLP) formed under the Limited Liability Partnership Act, 2008.

Stakeholders Involved

The acquisition involves the transfer of shares held by several key stakeholders in these companies, primarily:

• Plenty Private Equity Fund I Limited (Plenty)

• Multiples Private Equity Fund II LLP (Multiples Fund II)

• Plenty CI Fund I Limited (Plenty CI)

These funds are all part of the Multiples Group, which has made significant investments in various industries ranging from financial services to technology and infrastructure. Through this acquisition, the Multiples GIFT Fund will expand its shareholding in these three companies, further consolidating its stake in diverse and high-growth sectors of the economy.

Strategic Implications

This acquisition aligns with the broader investment strategy of the Multiples Group, which is focused on identifying high-potential opportunities across various sectors. The financial services and technology sectors have seen rapid growth in India, with a surge in demand for MSME loans, digital solutions, and AI-powered services. By increasing its shareholding in these companies, Multiples GIFT Fund seeks to capitalize on these growth opportunities.

For Vastu, the investment may provide an opportunity to expand its product offerings, particularly in the MSME and auto loan segments. The company’s presence in the housing finance space, which is crucial for the Indian economy, positions it well to leverage the growing demand for home and property loans.

APAC, as an NBFC, is strategically placed to benefit from the increasing need for MSME financing in India, where small businesses form the backbone of the economy. The approval of this acquisition is expected to boost APAC’s ability to serve this segment more effectively, with enhanced capital and resource support from the Multiples GIFT Fund.

For Quantiphi, the investment by Multiples GIFT Fund can provide an additional boost to its expansion plans, particularly in the AI and machine learning spaces. India’s growing tech ecosystem presents a promising environment for Quantiphi to continue developing cutting-edge solutions, while also benefiting from its global presence in the AI-driven business solutions market.

Regulatory Approval and Future Prospects

The approval by the CCI is a significant step toward finalizing the transaction, with the regulatory body evaluating the potential competition concerns arising from the shareholding changes. The CCI’s approval indicates that the proposed combination does not raise any major competitive issues that would affect market dynamics in the respective sectors.

Moving forward, the Multiples GIFT Fund, which operates within the framework of India’s International Financial Services Centre (IFSC), aims to bolster investments in key sectors that are expected to witness strong growth. The acquisition also emphasizes the growing role of private equity funds in shaping the future of India’s financial and technological landscape.

With the increasing trend of consolidation in financial services and technology, the acquisition is poised to have long-term positive impacts on all three companies involved. The deal underscores the importance of strategic investments in fostering innovation and improving access to financial products and services across the country.

Conclusion

The approval of the acquisition by the Competition Commission of India marks a significant development in the Indian private equity landscape, particularly in the financial services and technology sectors. By acquiring stakes in Vastu, APAC, and Quantiphi, Multiples GIFT Fund is poised to make a substantial impact on the growth trajectory of these companies and help drive innovation and financial inclusion in India. As the country continues to experience rapid economic development, such strategic investments will play a crucial role in shaping the future of its industries.