New Delhi, November 25: Muthoot Finance will soon venture into mutual fund asset management space, as the non-banking financial company has announced to acquire IDBI Asset Management Limited and IDBI MF Trustee Company Limited, upon approval from the regulators, including Sebi. The transaction is expected to be completed by February 2020-end.
The move comes only two weeks after IDBI Bank Ltd announced its second quarter net loss to Rs 3,459 crore, as compared to a net loss of Rs 3,602.49 crore during the same period a year ago. The NBFC announcing the acquisition today said the approximate value of IDBI Mutual Fund’s assets under management (AUM) is more than Rs 5,300 crore, and runs 22 schemes.
“Upon completion of the transaction, Muthoot Finance Limited will purchase 100 per cent equity shares of IDBI AML and IDBI MF held by the sellers for a total consideration of Rs. 215 crores,” the NBFC. ICICI Securities Limited acted as advisors in the transaction to sellers, while AZB & Partners as legal advisor to MFIN, and J Sagar Associates as the legal advisor to the sellers.
“We are excited to venture into this new path in the financial services space and we are equally excited to partner with strong, experienced and enthusiastic management team at IDBI Mutual Fund as we embark upon the next level of our journey,” the statement cited George Alexander Muthoot, managing director of Muthoot Finance Limited.
Earlier this year, IDBI Bank sold 51 per cent controlling stake to Life Insurance Corporation of India (LIC), which market the latter’s entry into the banking space.