NBFC 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.
Upon completion of the transaction, Muthoot Finance will purchase 100% equity shares of IDBI Asset and IDBI MF Trustee Company held by the sellers for a total consideration of Rs 215 crore.
The transaction is expected to be completed by the end of February 2020, subject to receipt of necessary regulatory approvals, the company said. Upon closing, both IDBI AMC and IDBI MF Trustee Company will become wholly-owned subsidiary companies of MFIN.
Muthoot Finance MD George Alexander Muthoot said, "At Muthoot, we pride ourselves in venturing into mutual fund space through such an established player. The business objectives and customer centric approach that we follow within Muthoot Group is well aligned with the business objectives of mutual fund industry. 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."
Promoted by IDBI Bank in 2010, IDBI Mutual Fund is a profit-making AMC with AUM of approximately Rs 5,300 crore. IDBI MF runs 22 schemes with robust AUM across products, geography and investors, Muthoot said in a regulatory filing.
Consolidated net profit of Muthoot group, which also operates home loan, micro-finance and insurance broking subsidiaries, for the three months ended September 30 stands at Rs 908.5 crore, against Rs 515 crore in the same period of last fiscal.