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IIFL set to buy L&T wealth to add Rs 26,000 cr business, as it sets eyes on Kotak’s throne

Ashish Pandey
Loan against insurance policy and mutual fund

With an aim to bridge the gap with the industry leader Kotak in wealth management business, India Infoline Finance Ltd (IIFL) Wealth and Asset Management is in advanced talks to buy wealth management unit of Larsen & Toubro (L&T) Financial Services for up Rs 300 crore, a source close to the development told Financial Express Online. IIFL Wealth is now tilting towards inorganic growth as against the organic strategy adopted by it earlier so as to take on Kotak in the wealth business, the source said.

Earlier, last year, IIFL Wealth had acquired Wealth Advisors India, a Chennai based wealth management firm, for a total consideration of Rs 235 crore. Before that, in 2017, Nirmal Jain-firm acquired Ashburton India Equity Opportunities for an undisclosed amount.

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L&T Finance is looking to pare non-core businesses to focus on consumer and infrastructure lending. In its first quarter results of the ongoing fiscal, the company had said that it is looking to focus on core businesses such as rural lending, housing finance and infrastructure finance, and even and consumer loans. IIFL Wealth declined to comment on the matter. L&T Finance declined to comment saying that the company doesn’t comment on rumours.

Kotak Mahindra Bank's wealth management arm is India's largest wealth management firm with assets under management (AUM) worth $33.6 billion. This is followed by ICICI $25.6 billion and then IIFL $21.4 billion in India, according to Asian Private Banker report of 2018. IIFL Wealth, one of the largest investor advisors in the country, now manages AUM worth Rs 1,69,312 crore from 10,000 plus high net worth families in India and abroad. In FY19, the company reported an income of Rs 1,059.2 crore and profit of Rs 384 crore.