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Baring Private Equity Asia EQT is set to buy India-based Housing Development Finance Corp's educational loan unit - Credila Financial Services - for about $1.3 billion to $1.5 billion, The Economic Times reported on Monday.

The buyout fund will acquire 90% of the company, with HDFC retaining the remaining 10% stake, which it may sell over the next two years, the report said, citing people aware of the matter.

A formal announcement is expected by June-end, ahead of the merger between HDFC Ltd and HDFC Bank Ltd, to create the world's fourth-largest bank, the people said.

Baring has formed a consortium with ChrysCapital for the transaction, they said.

Baring and HDFC did not immediately respond to Reuters' request for comment.