A Bandhan Financial Holdings Limited (BFHL)-led consortium has won the bid to buy and acquire IDFC Asset Management Company (AMC) and IDFC AMC Trustee Company for Rs 4,500 crore.
- The consortium comprises BFHL, Lathe Investment (an affiliate of Singapore’s sovereign fund GIC), Tangerine Investments, and Infinity Partners (affiliates of ChrysCapital).
- BFHL will own 60% of the AMC, while Singapore’s sovereign fund GIC and ChrysCapital will each own 20%.
Background: After facing shareholder backlash over delays in divestments and mergers, IDFC announced the sale of its mutual fund (MF) business.
- The IDFC Board is committed to pursuing the merger of IDFC Limited and IDFC Financial Holding Company with IDFC First Bank with this divestment.
Note: This is the second major acquisition in the mutual fund market in recent years after HSBC Asset Management (India) Pvt Ltd purchased L & T Investment Management from L & T Finance for USD 425 million in December 2021.Â
Key Points:
i.The consortium is hopeful of receiving the necessary approvals and expects the process of acquisition to be completed in the next nine to twelve months.
ii.BFHL will pay for the acquisition with a portion of the Rs. 10,600 crores it earned from the diluting of its stake in Bandhan Bank.
iii. Bandhan Financial Holding is the holding company of Bandhan Bank, a private sector lender. The Bandhan group would be able to penetrate India’s booming mutual fund industry with this deal, which presently manages Rs. 38 trillion in assets.
- Bandhan Financial Services Limited (BFSL) is the parent company of Bandhan Financial Holdings Ltd (BFHL) and Bandhan Bank.
HDFC Sells A 3% Stake in Bandhan Bank in A Block Deal for Rs. 1,522 Crores
In a bulk deal, HDFC Ltd sold 4.96 crore shares in Bandhan Bank (for a total of 49,632,349 equity shares), for a sum of almost Rs. 1,522 crores.
- The shares were sold at a price of Rs. 306.61 a share, equating to about a 3.08 percent stake of HDFC in Bandhan Bank.
i.The move comes shortly after the announcement of HDFC Ltd and HDFC Bank merging, and the process will take time to complete, with completion expected in the second or third quarters of 2023–24.
ii.To meet current regulatory standards, HDFC Ltd. will have to cut its investment in Bandhan Bank to less than 5%. However, post the block deal, HDFC currently owns 4.95% of Bandhan’s paid-up share capital.
iii. As of December 31, 2021, HDFC Ltd held 15.93 crore shares amounting to 9.89% stake in Bandhan Bank.
About Bandhan Bank
MD & CEO – Chandra Shekhar Ghosh
Headquarter – Kolkata,West Bengal
Tagline – ‘Aapka Bhala. Sabki Bhalai.’, (Your benefit. Everyone’s welfare.)
