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business | IST

Blackstone looks to buy 100% stake in L&T MF; SEBI nod crucial

Bulge bracket private equity firm Blackstone has agreed to buy 100 percent in L&T AMC for Rs 3,200 crore.

A long round of negotiations between Blackstone and L&T Finance Holdings for the sale of L&T Mutual Fund is over, sources have told CNBC-TV18, with the bulge bracket private equity firm agreeing to buy 100 percent in the AMC for Rs 3,200 crore.
An announcement for the deal is expected shortly.
The deal, if and when it goes through, will be the first instance of a foreign investor buying out an Indian mutual fund business. This will make a nod by market regulator SEBI crucial and something to be watched out for, sources said.
They added that Blackstone's legal advisors are busy building a case for SEBI to approve the PE firm's buyout of L&T Mutual Fund, as the company is already in already a sponsor in business trusts in India.
L&T Finance, the parent company of L&T AMC, bolstered its fund business through the acquisition of Fidelity in 2012 -- it acquired DBS AMC in 2009.
But the mutual fund business has been tough for many companies with the top 10 AMCs garnering 84 percent of the assets. The industry has more than 40 players, with L&T Mutual Fund, with assets of Rs 31,639 crore, being the 13th-ranked, according to Morningstar data.
Deal experts also indicate that the valuations for this deal could form the benchmark for many other asset management assets waiting to be sold. Besides, if the market regulator allows Blackstone a full buyout of L&T Mutual Fund, it could give a fillip to the deal scene in this sector.
Blackstone, L&T Finance Holdings did not offer comment on CNBC-TV18’s query on the deal development.