Groww to acquire Indiabulls MF for Rs 175 cr

By: |
May 11, 2021 3:43 PM

Online investment platform Groww on Tuesday announced that it will be acquiring Indiabulls Mutual Fund for a total consideration of Rs 175 crore.

The Alternate Investment Fund (AIF) and Portfolio Management Service (PMS) businesses will be demerged from the existing IBAMC structure, and remain under Indiabulls Housing Finance, it said. (Representational Image)

Online investment platform Groww on Tuesday announced that it will be acquiring Indiabulls Mutual Fund for a total consideration of Rs 175 crore. The digital platform will acquire Indiabulls Asset Management Company (IBAMC) and the trustee company for Rs 175 crore, which includes a cash and equivalent component of Rs 100 crore, an official statement said, adding that the transaction is subject to regulatory approvals.

The Alternate Investment Fund (AIF) and Portfolio Management Service (PMS) businesses will be demerged from the existing IBAMC structure, and remain under Indiabulls Housing Finance, it said. The announcement comes months after capital markets regulator Sebi had allowed digital platforms like fintechs to enter the mutual funds business and Groww becomes the first fintech to enter the asset management space.

Indiabulls Mutual Fund has 13 funds with the Quarterly Average Assets Under Management at Rs 663.68 crore as of March 2021, down from the Rs 921.33 crore in December 2021. Selling the MF will help the parent Indiabulls Housing Finance’s capital position. Groww has over 1.5 crore customers who use the platform to invest in mutual funds, stocks and exchange-traded funds (ETFs) and wishes to increase the retail participation in equity, the statement said.

“With the capability to create products, we plan to make mutual funds even more accessible – by making them simpler, more transparent, and by lowering the cost further,” Lalit Keshre, the chief executive and co-founder of Groww, said. Indiabulls Housing Finance plans to grow its Real Estate Asset Management business through AIF structures in line with its asset-light strategy. While IBHFL will focus largely on retail disbursements, the AIF structure will be used for the wholesale opportunity of early-stage project finance, the statement said.

“We have made the decision to divest our interest in the retail mutual fund business to be able to consolidate capital and provide greater focus in building the company’s real estate asset management business by way of Alternate Investment Fund, in line with the company’s asset-light strategy,” Gagan Banga, the vice chairman and managing director of Indiabulls Housing Finance, said. The Indiabulls Housing Finance scrip was trading 1.63 per cent down at Rs 183.80 a piece on the BSE.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Delayed payments: Pending MSME dues cleared grow nearly three-fold since December 2020
2‘Unless there’s significant deflation next year, we are on track to deliver Rs 10k-cr revenue’
3SC pulls up ONGC for not paying fees to arbitrators