Mumbai: Gold loan provider Muthoot Finance Muthoot Finance (MFIN) on Friday said that it has entered into a definitive agreement to acquire IDBI Asset Management and IDBI MF Trustee Company, paving the way for Muthoot Finance’s entry into the mutual fund asset management space.
The business will change hands for Rs 215 crore, with the buyer assigning the fund a value of 4 per cent of the total assets managed. Promoted by IDBI Bank in 2010, IDBI Mutual Fund is one of the profit making AMCs with assets of Rs 5,348 crore. The transaction is expected to be completed by February 2020 .
Promoted by IDBI Bank in 2010, IDBI MF is one of the profit making companies in the mutual fund space with Assets Under Management (AUM) of approximately Rs 5,300 crore.
“We are excited to venture into this new path in the financial services space,” said George Alexander Muthoot, Managing Director of Muthoot Finance. “We are equally excited to partner with the strong, experienced and enthusiastic management team at IDBI Mutual Fund as we embark upon the next level of our journey.”
IDBI MF runs 22 schemes with robust AUM across products, geography and investors.
Muthoot Finance said it would purchase 100 percent equity shares in both companies for Rs 215 crore.
The Indian mutual fund industry has been one of the fastest growing businesses in the past five years. Assets under management have increased from Rs 10.96 lakh crore in October 2014 to Rs 26.33 lakh crore in October 2019, a 2.5x rise in a span of 5 years.
Earlier this year, Reliance Capital sold its asset management business to Nippon Life Asset Management, while Toronto based Manulife picked up a 49 per cent stake in Mahindra Asset Management. Bank of Baroda and BNP Paribas AMC AMC have also decided to merge their asset management arms.
