Srei, Dundee In Talks For AMC Sale

Mumbai, April 23: | Updated: Apr 24 2002, 05:30am hrs
Indicating the continuing process of consolidation in the Indian mutual fund (MF) industry, Canadian mutual fund Dundee is in advanced stages of talks with Kolkata-based non-banking finance company (NBFC), Srei International Finance Limited, for sale of Dundee’s asset management company (AMC) to Srei. Sources said, “most matters in regard to the deal have been finalised, and only the approval from the Securities and Exchange Board of India (Sebi) is pending”.

However, Srei International Finance Limited’s managing director, Hemant Kanoria, said, “nothing concrete has been finalised yet and it is very premature to comment about the subject. We are at the discussions stage. A clear picture is likely to be out by next week.”

Dundee MF chairman Dhanesh Varma said, “I am not aware that the deal has been finalised. From our front, it is status quo: we are scouting for a suitable buyer.”

“We have done business with Srei for years and also have spoken to Srei about the sale of our MF business, but no substantial headway has yet been made,” Mr Varma added.

The MF industry in India is going through a consolidation drive. Some of the recent developments in the MF industry include the Templeton Asset Management (India) memorandum of understanding (MOU) to acquire 100 per cent stake in Pioneer ITI AMC. Earlier, BoI Mutual Fund sold some of its schemes to Creditcapital Asset Management Company.

The Canadian mutual fund Dundee was up for grabs for quite some time now. The chairman of Dundee had earlier gone on record saying Dundee had made a strategic decision to exit from India and was scouting for a buyer who can take over the assets of the fund.

However, the talks with Srei are a new twist since Srei does not figure in the MF sector, but is an NBFC.

Dundee currently has six schemes under its belt with a total asset size of Rs 30 crore, with equity schemes contributing around Rs 10 crore to the AMC. The fund’s assets were at over Rs 100 crore six months back, but this has now reduced substantially.

Dundee MF started its Indian operations in 1998 and within a couple of years its assets under management reached around Rs 200 crore. The Delhi-based MF is managed by Dundee Investment & Research Private Limited, the asset management company with Dundee Trust Privat Limited, as the Trustee Company, and is sponsored by Dundee Bancorp Inc and Dynamic Mutual Funds Limited of Canada.

The Kolkata-based Srei International Finance is an NBFC player engaged in the business of leasing and hire-purchase of construction equipment and in infrastructure-related areas like that of power, roads, bridges, railways, ports and urban-rural infrastructure.