Bandhan Group-led consortium to acquire IDFC MF for Rs 4,500 crore
- Bandhan-led consortium has entered into a definitive agreement to acquire IDFC AMC
- The consortium also includes ChrysCapital and Singapore’s sovereign fund GIC
- Bandhan Bank itself offers products from about 8-10 mutual funds
Bandhan Financial Holding-led consortium has entered into a definitive agreement to acquire IDFC Asset Management Company and IDFC AMC Trustee Company for a consideration of Rs 4,500 crore, subject to receipt of necessary regulatory approvals and customary closing conditions.
The consortium by the holding company also includes private equity firm ChrysCapital and Singapore’s sovereign fund GIC. In the consortium, Bandhan Financial Holding owns 60% of the equity and the other two partners each own 20%.
Bandhan Financial Holding is the holding company of the Kolkata-based private sector lender Bandhan Bank. The deal will enable the Bandhan Group to enter India’s growing mutual fund business, which currently manages assets worth Rs 38 trillion.
The Bandhan consortium was selected through a highly competitive divestment process that saw the participation of strategic players and financial investors. This is a highly tracked acquisition and will be the largest deal in the Indian asset management industry to date, said IDFC said in a statement.
Anil Singhvi, Chairman of IDFC Limited 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 the signing within six 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.”
Notably, Citigroup Global Markets Private Limited acted as the exclusive financial advisor. Cyril Amarchand Mangaldas is the legal advisor to IDFC Limited.
IDFC announced the sale of its mutual fund business after the company faced shareholders’ outrage on delay in disinvestments and mergers.
In the previous financial year, the fund house reported a profit after tax of Rs 144 crore as compared to Rs 49.4 crore in FY20.