IDFC Ltd on Wednesday introduced the sale of its mutual fund enterprise to a consortium led by Bandhan Financial Holdings, for a consideration of Rs 4,500 crore. The deal is topic to the required regulatory approvals.
“IDFC Restricted and a consortium comprising Bandhan Monetary Holdings Ltd, (Singapore’s sovereign wealth fund) GIC and (non-public fairness agency) ChrysCapital have entered right into a definitive settlement to amass IDFC Asset Administration Firm Restricted and IDFC AMC Trustee Firm Restricted from IDFC Restricted,” IDFC Ltd stated in an announcement.
The deal is “for a consideration of Rs 4,500 crore, topic to the receipt of mandatory regulatory approvals and customary closing circumstances”, the assertion stated.
Bandhan Monetary is the holding firm of Kolkata-based Bandhan Financial institution. In September 2021, IDFC Restricted and IDFC Monetary Holding Firm Restricted in its board assembly had authorised the divestment of its mutual fund enterprise.
“The Bandhan consortium was chosen by means of a extremely aggressive divestment course of which witnessed sturdy participation from strategic gamers and monetary buyers. This can be a extremely tracked acquisition and would be the largest such deal within the Indian asset administration business to this point,” IDFC stated within the assertion.
The deal will permit the Bandhan group to enter India’s rising mutual fund (MF) business, which manages Rs 38 lakh crore of belongings. Established in 2000, IDFC AMC manages over Rs 1.15 lakh crore of belongings underneath administration (AUM) on the finish of March 31, 2022, for over 1.5 million investor folios representing main establishments, corporates, household places of work and particular person shoppers. It’s among the many top-10 MF corporations in India.
Within the monetary yr 2020-21, the fund home noticed its revenue after tax at Rs 144 crore in comparison with Rs 79.4 crore in FY20. Sometimes, offers in MFs happen between 5-7 per cent of the AUM.
IDFC Chairman Anil Singhvi stated, “This transaction is a big milestone in our plan of unlocking worth, and the consideration demonstrates the sturdy place of IDFC AMC within the Indian Mutual Fund house. We’ve got achieved signing inside six months of the Board’s choice to divest, which additional demonstrates IDFC board’s dedication to consummate the merger of IDFC Restricted and IDFC Monetary Holding Firm with IDFC First Financial institution.”
He added that the Bandhan consortium with its sturdy model and assets will additional strengthen the distribution of merchandise enhancing the general expertise for IDFC AMC’s buyers and distributors.
Bandhan Monetary Holdings Managing Director Karni S Arha stated, “The acquisition of IDFC AMC supplies us with a scaled-up asset administration platform, with a stellar administration staff and a pan India distribution community. IDFC AMC may benefit considerably from the Bandhan model and proceed strengthening its place within the asset administration business.”
He added that he’s pleased to companion with marquee buyers corresponding to GIC and ChrysCapital and is assured that this enterprise will improve worth for all of the stakeholders of Bandhan and IDFC AMC.
Choo Yong Cheen, chief funding officer (non-public fairness) of GIC, stated: “GIC is happy to proceed our partnership with the Bandhan group and ChrysCapital by means of this new funding in IDFC AMC. We imagine IDFC AMC is in a beneficial place to seize the sturdy secular progress within the at present underpenetrated Indian asset administration business.”
ChrysCapital Managing Director Ashish Agarwal stated, “ChrysCapital is worked up to companion with BFHL and GIC to purchase out IDFC AMC, a top quality platform with a seasoned administration staff. The corporate is effectively poised for the longer term with sturdy business tailwinds together with rising financialisation of financial savings and a rising fairness tradition amongst the youthful technology.”