Bandhan consortium to acquire IDFC AMC for Rs 4,500 crore

A consortium of Bandhan Financial Holdings Ltd, global investment firm GIC and private equity firm ChrysCapital has emerged as the winner to acquire IDFC Asset Management Company Ltd (IDFC AMC) and IDFC AMC Trustee Company Ltd from IDFC Ltd for a consideration of Rs 4,500 crore.

Bandhan Financial Holdings is the promoter of Bandhan Bank. Last year, the board of IDFC Ltd and IDFC Financial Holding Company Ltd had approved the divestment of mutual fund business, IDFC AMC.

In a release, IDFC Ltd said that it has entered into a definitive agreement with the Bandhan consortium for the latter to acquire IDFC AMC and IDFC AMC Trustee Company for Rs 4,500 crore.

The proposed transaction will be completed upon receipt of requisite regulatory and other approvals.

"The Bandhan consortium was selected through a highly competitive divestment process which witnessed strong participation from strategic players and financial investors. This is a highly tracked acquisition and will be the largest deal in the Indian asset management industry to date," the release said.
 
The agreement envisages continuity of the current management team and investment processes at IDFC AMC. "This will be supplemented well by Bandhan's brand as well as GIC's and ChrysCapital's international network and experience which will aid IDFC AMC in further cementing its position in the asset management industry and propel further growth," it added. 
 
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IDFC Ltd Chairman Anil Singhvi called the transaction a significant milestone in the company's plan of unlocking value. "...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," he added.
 
Established in 2000, IDFC AMC had over Rs 1,15,000 crore of assets under management (AUM) at the end of March 31, 2022 for over 10 lakh investor folios.
 
"Bandhan has always focused on financial inclusion and making formal financial services available to the masses. 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," Bandhan Financial Holdings MD Karni S Arha said.
 
The acquisition of IDFC AMC will provide Bandhan Financial Holdings with a scaled-up asset management platform, a stellar management team and a pan India distribution network, he added.

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