A consortium comprising Bandhan Financial Holdings Ltd, Singapore's sovereign wealth fund GIC and private equity firm ChrysCapital is set to acquire IDFC Asset Management Company.
The acquisition will be the largest deal in the Indian asset management industry to date.
The deal is expected to aid IDFC AMC in further cementing its position in the asset management industry and propel further growth, according to an exchange filing. "This will be supplemented well by Bandhan’s brand as well as GIC’s and CC’s international network and experience," the filing says.
The Bandhan consortium was selected through a competitive divestment process which witnessed strong participation from strategic players and financial investors, IDFC says in its filing.
The agreement envisages continuity of the current management team and investment processes at IDFC AMC, it adds.
"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," says Anil Singhvi, Chairman of IDFC. "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."
Bandhan Financial Holdings is wholly-owned by Bandhan Financial Services Ltd, a non‐banking finance company incorporated in 2014. BFHL is the promoter and an associate company of Bandhan Bank.
"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," says Karni S Arha, managing director of Bandhan Financial Holdings. "IDFC AMC could benefit significantly from the Bandhan brand and continue strengthening its position in the asset management industry."
Citigroup Global Markets India acted as the financial advisor and Cyril Amarchand Mangaldas as the legal advisors to IDFC. JM Financial acted as the financial advisor and Khaitan & Co and Trilegal as the legal advisors to the Bandhan consortium.