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RBI rejects Muthoot Finance's proposal to buy IDBI MF

·1-min read

A share purchase agreement dated 22 November 2019 was entered into between Muthoot Finance, IDBI Bank, IDBI Capital Markets & Securities, IDBI Asset Management and IDBI MF Trustee Company to purchase 100% equity shares of IDBI AMC, subject to receipt of necessary regulatory approvals.

However, RBI rejected Muthoot Finance's proposal to acquire IDBI Asset Management on the grounds that “the activity of sponsoring a mutual fund or owning an asset management company is not in consonance with the activity of an operating NBFC”.

Consequently, the NBFC on 23 November 2020 informed the equity market regulator Sebi that it is unable to proceed with the proposed transaction.

Shares of Muthoot Finance fell 0.65% to Rs 1,130.75 on BSE.

The NBFC's consolidated net profit rose 2.5% to Rs 930.80 crore on 17.4% jump in total income to Rs 2,824.19 crore in Q2 September 2020 over Q2 September 2019.

Muthoot Finance is the largest gold financing company in India in terms of loan portfolio.



Source: Capitalmarket.com