Groww to take over Indiabulls MF for Rs 175Cr

groww indiabulls acquisition

Online investment platform Groww announced on Tuesday that it will acquire Indiabulls Mutual Fund for a cumulative amount of Rs 175 crore.

The digital platform will acquire Indiabulls Asset Management Company (IBAMC) and the trustee company for Rs 175 crore, which comprises a cash and equivalent component of Rs 100 crore, an official statement said, adding that the deal is subject to regulatory permissions.

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

The news comes months after the market regulator had allowed digital platforms like fintechs to penetrate 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 Rs 921.33 crore in December 2021.

Selling the Mutual Fund will help the parent Indiabulls Housing Finance’s capital position.

Groww has more than 1.5 crore customers who utilize the platform to invest in mutual funds, stocks, and exchange-traded funds (ETFs) and wishes to grow the retail participation in equity, the statement said.

Speaking about the acquisition, Lalit Keshre, the chief executive and co-founder of Groww, 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.’

Indiabulls Housing Finance intends to expand its Real Estate Asset Management business via AIF structures keeping up with its asset-light strategy. While IBHFL will focus mostly on retail disbursements, the AIF structure will be utilized for the wholesale opportunity of early-stage project finance, the statement said.

Commenting on the development, Gagan Banga, the vice chairman and managing director of Indiabulls Housing Finance, said, ‘We have decided 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.’

The Indiabulls Housing Finance scrip was trading 1.63 percent down at Rs 183.80 apiece on the BSE. 

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