Reliance MF, Blackrock lead race for IDFC AMC

MUMBAI: Blackrock Inc., the world’s largest asset manager, and Anil Ambani-controlled Reliance Nippon Life Asset Management Ltd are front runners to buy IDFC Asset Management Co. Ltd, two people directly aware of the development said.

The first round of bidding for IDFC Mutual Fund, which manages ₹70,000 crore worth of assets, happened on Tuesday, with Reliance Mutual Fund and Blackrock emerging as top bidders, the people said, requesting anonymity.

If Reliance AMC acquires IDFC Mutual Fund, the Anil Ambani-controlled company will become the country’s largest asset management company with combined assets of around ₹3.15 lakh crore. On the other hand, the acquisition will help Blackrock maintain its presence in India after exiting a mutual fund joint venture with DSP Group on Monday.

Potential buyers for IDFC Asset Management are likely to offer ₹2,000-2,500 crore, the people cited earlier said, although the company’s owners have sought a valuation of around ₹4,000 crore. Bidders are ascribing a lower price because of the asset manager’s declining profitability and failure to retain some top executives, they said.

IDFC Mutual Fund’s profit plunged by 44% to ₹54 crore in the financial year ended 31 March from ₹97 crore in the previous year. The asset manager had reported a profit of ₹110 crore in the year ended March 31, 2016.