Bandhan consortium to buy IDFC mutual fund biz for Rs 4.5K crore

IDFC Ltd has decided to sell IDFC Asset Management Company and IDFC AMC Trustee Company Ltd to a consortium comprising Bandhan Financial Holdings (BFHL), GIC and ChrysCapital for a consideration of Rs 4,500 crore.

The consortium was chosen after a competitive divestment process that saw participation from strategic players and financial investors. “This will be the largest deal in the Indian asset management industry to date,” IDFC said.

Set up in 2000, IDFC AMC manages over Rs 1,15,000 crore of asset under management (AUM) as of March-end for over 10 lakh investor folios representing leading institutions, corporates, family offices and individual clients. IDFC AMC is India’s ninth largest asset manager by AUM, with presence in over 50 cities and investors in 750 cities and towns nationwide.

The deal envisages continuity of the current management team and investment processes at IDFC AMC, helping unitholders benefit from consistency in the investment approach of IDFC AMC.

IDFC Ltd chairman Anil Singhvi said: “This transaction is a significant milestone in our plan of unlocking value and the consideration demonstrates the strong position of IDFC AMC in the Indian mutual fund space. We have achieved signing within 6 months of the board’s decision to divest, which further demonstrates IDFC Board’s commitment to consummate the merger of IDFC Limited and IDFC Financial Holding Company with IDFC First Bank.”

He added, “The Bandhan consortium with its strong brand and resources will further strengthen distribution of products and improve overall experience for IDFC AMC’s investors and distributors.”

BFHL is the promoter and an associate company of Bandhan Bank. BFHL holds a 40 per cent stake in Bandhan Bank.

BFHL MD Karni S Arha said: “Bandhan has always focused on financial inclusion and making formal financial services available to the masses. We believe that the asset management industry will be one of the fastest growing segments in the Indian financial services industry and hence has been identified as a key vertical in our future growth plans.”

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