Hinduja Group's IIHL buys 60% stake in Invesco India Asset Management

Hinduja Group firm IndusInd International Holdings Limited (IIHL) has signed a deal with American investment management company Invesco to form a joint venture (JV) and acquire a 60% stake in Invesco Asset Management India Limited (IAMI).

“Invesco will retain a 40% stake in the newly formed JV, and both IIHL and Invesco will have sponsor status,” both companies say in a joint statement released today.

This is the second major deal by IIHL in recent times as its bid for the acquisition of Reliance Capital and its subsidiaries (Life, Health & General Insurance, Asset Reconstruction, Research & Securities Broking etc.) was recently approved by NCLT. The company is in the process of concluding the implementation of the resolution plan.

As per the release, the transaction, which is subject to customary regulatory approvals, will have an immaterial financial impact on Invesco Ltd. Motilal Oswal Investment Advisors acted as exclusive financial advisor to IIHL. Crawford Bayley and AZB acted as legal advisors to IIHL & Invesco respectively.

IAMI is the Indian arm of Invesco Ltd., a leading independent global investment management firm with over $1.6 trillion in assets under management.

IIHL, a Mauritius-based investment holding company with several investments in banking and financial assets, is the promoter entity of IndusInd Bank.

IAMI is the fifth largest foreign asset manager and the 17th largest domestic asset manager in India with combined onshore and offshore advisory and assets under management of ₹85,393 crore as of March 31, 2024, and a presence in 40 cities across the country.

“Both partners bring their respective strengths to the venture with Invesco’s portfolio of global products and processes, and IIHL facilitating a strong distribution network of 11,000+ pan India touch points and 45mn customer base,” the release notes.

Ashok Hinduja, Chairman, IIHL said, “This partnership with Invesco is aligned with our business philosophy & principles: ‘Partnership for Growth’ and ‘Act Local Think Global’ and is another step in the journey of Value Creation for our shareholders. It was our vision to transform IIHL into a BFSI powerhouse. Our endeavour is to reach ‘last home, last investor’ in a transparent and efficient manner and living up to investors’ expectation that ‘mutual fund sahi hai’.”

Speaking on the deal, Andrew Lo, senior managing director and chief executive officer of Invesco Asia Pacific, says, “We are excited to partner with IIHL to continue to expand distribution of our high quality, global and domestic investment capabilities to serve more domestic investors in such an important market.”

“We are committed to serving our clients’ needs across India and maintaining our significant presence in Hyderabad as well,” Lo adds.

IAMI began operations in India in late 2008, with the acquisition of Lotus India Asset Management Company and has since grown to serve over 1.6 million retail investor folios and over 39,000 empanelled distributors, with over 70% of its AUM in equity and equity-oriented assets. Invesco also operates an enterprise centre in Hyderabad employing more than 1,700 staff across a range of global support functions, including information technology, investment operations, finance, compliance, and human resources.

“A strong domestic partner will significantly increase the JV’s ability to expand into more Indian cities and towns, which are driving industry growth. The Indian mutual fund industry is at an inflexion point with favourable demographics and a rising middle class which will prefer transparent investment products like mutual funds and ETFs,” says Saurabh Nanavati, CEO of Invesco Asset Management India Limited, who will continue to lead the new JV along with the existing management team.