MUTHOOT FIN TO BUY IDBI BANK’S MF BUSINESS

MUMBAI: Gold loan financier Muthoot Finance Ltd is in advanced stages of acquiring IDBI Asset Management Ltd, the mutual fund unit of Life Insurance Corp. of India (Lic)-owned private sector lender IDBI Bank Ltd, three people aware of the development said.

“The deal is expected to close this week. Initially, the binding offers had come in from Muthoot Finance and Vikas Khemani’s Carnelian Capital Advisors Llp,” said one of the three persons cited above, all of whom spoke under condition of anonymity.

Spokespersons at IDBI Bank were not available for comment, while Muthoot Finance did not respond to emailed queries. Former Edelweiss executive Vikas Khemani declined to comment over a phone call.

As on March 31, 2019, IDBI Bank owned 66.67% stake in IDBI Asset Management with IDBI Capital Markets and Securities holding a 33.33% stake.

IDBI Asset Management, also referred to as IDBI Mutual Fund, managed 22 schemes during FY19, comprising 12 equity fund schemes, six debt fund schemes, two hybrid fund schemes and one each Gold Fund of Funds and Gold Exchange Traded Funds scheme.

The company’s total assets under management (AUM) fell 16% year-on-year (y-o-y) to ₹6,238 crore in FY19 due to decrease in equity and liquid AUMS, according to the latest data available on its website. The company plunged to a loss of ₹4.34 crore in FY19 from a year-earlier profit of ₹8 crore. Revenue from operations fell 25% y-o-y to about ₹60 crore.

IDBI Bank is seeking to sell non-core assets, including equity stakes.