IDFC Limited (IDFC) and a consortium comprising Bandhan Financial Holdings Limited, GIC and ChrysCapital have entered into a definitive agreement to acquire IDFC AMC and IDFC AMC Trustee Company, for a consideration of Rs 4,500 crore. The acquisition is subject to necessary regulatory approvals.
The Bandhan consortium was selected through a divestment process which witnessed strong participation from strategic players and financial investors. The agreement envisages continuity of the current management team and investment processes at IDFC AMC.
Anil Singhvi, Chairman of IDFC Limited commented: "This transaction is a significant milestone in our plan of unlocking value and the consideration demonstrates strong position of IDFC AMC in the Indian Mutual Fund space. We have achieved signing within 6 months of the Board’s decision to divest, which further demonstrates IDFC Board’s commitment to consummate the merger of IDFC Limited and IDFC Financial Holding Company with IDFC First Bank. The Bandhan consortium with its strong brand and resources will further strengthen distribution of products and improving overall experience for IDFC AMC’s investors and distributors."
While, Karni S Arha, Managing Director of Bandhan Financial Holdings Limited said: “Bandhan has always focused on financial inclusion and making formal financial services available to the masses. We believe that the asset management industry will be one of the fastest growing segments in the Indian financial services industry and hence has been identified as a key vertical in our future growth plans. The acquisition of IDFC AMC provides us with a scaled-up asset management platform, with a stellar management team and a pan India distribution network. IDFC AMC could benefit significantly from the Bandhan brand and continue strengthening its position in the asset management industry. Also, we are happy to partner with marquee investors such as GIC & ChrysCapital and are confident that this venture will enhance value for all the stakeholders of Bandhan and IDFC AMC."
Additionally, Choo Yong Cheen, Chief Investment Officer of Private Equity, GIC said: "GIC is pleased to continue our partnership with the Bandhan group and ChrysCapital through this new investment in IDFC AMC. We believe IDFC AMC is in a favourable position to capture the strong secular growth in the currently underpenetrated Indian asset management industry."
It was earlier reported that a consortium led by Kolkata-based Bandhan Group and joined by Singapore's GIC and private equity firm ChrysCapital was likely to have emerged as frontrunner in the ongoing mega sale process of IDFC Mutual Fund (MF), multiple industry sources with knowledge of the matter had told Moneycontrol.
Ashish Agarwal, Managing Director, ChrysCapital said: "ChrysCapital is very excited to partner with BFHL and GIC to buy out IDFC AMC, a quality platform with a seasoned management team. The Company is well poised for the future with strong industry tailwinds including increasing financialization of savings and a growing equity culture amongst the younger generation."