IDFC, a financial services business, said that it has reached a deal with a consortium led by Bandhan Financial Holdings to buy IDFC Asset Management Company and IDFC AMC Trustee Company for Rs 4500 crore. IDFC and a consortium of Bandhan Financial Holdings, GIC, and ChrysCapital have signed a formal deal to buy IDFC Asset Management Company and IDFC AMC Trustee Company from IDFC for Rs 4,500 crore, according to a statement released here. The sale, which the firm described as a “highly watched acquisition,” will be the largest in the Indian asset management market to date, according to the company.
“The Bandhan consortium was selected through a highly competitive divestment process which witnessed strong participation from strategic players and financial investors,” it said. The agreement ensures that IDFC AMC’s present management team and investment methods remain in place, allowing unitholders to benefit from IDFC AMC’s high-quality investing methodology.
“This will be supplemented well by Bandhan’s brand as well as GIC’s and CC’s international network and experience which will aid IDFC AMC in further cementing its position in the asset management industry and propel further growth,” it added. Commenting on the development, Anil Singhvi, Chairman of IDFC said, “This transaction is a significant milestone in our plan of unlocking value and the consideration demonstrates strong position of IDFC AMC in the Indian mutual fund space.”
He also stated that the agreement took place within six months of the Board’s resolution to divest, demonstrating the resolve of the IDFC Board to complete the merger of IDFC and IDFC Financial Holding Company with IDFC First Bank. “The Bandhan consortium with its strong brand and resources will further strengthen the distribution of products and improve the overall experience for IDFC AMC’s investors and distributors,” Singhvi added. Bandhan has always focused on financial inclusion and making formal financial services available to the poor, according to Karni S Arha, Managing Director of Bandhan Financial Holdings. “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,” he said.
IDFC AMC’s purchase offers us a scalable asset management platform, as well as a great management team and a pan India distribution network.
“IDFC AMC could benefit significantly from the Bandhan brand and continue strengthening its position in the asset management industry. Also, we are happy to partner with marquee investors such as GIC & ChrysCapital and are confident that this venture will enhance value for all the stakeholders of Bandhan and IDFC AMC,” Arha added. Commenting on the deal Choo Yong Cheen, Chief Investment Officer of Private Equity, GIC said, “GIC is pleased to continue our partnership with the Bandhan group and ChrysCapital through this new investment in IDFC AMC. We believe IDFC AMC is in a favourable position to capture the strong secular growth in the currently under‐penetrated Indian asset management industry.”
