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IDFC Limited and a consortium comprising Bandhan Financial Holdings Limited (“BFHL”), GIC (“GIC”), and ChrysCapital (“CC”) have entered into a definitive agreement to acquire IDFC Asset Management Company Limited (“IDFC AMC”) and IDFC AMC Trustee Company Limited from IDFC Limited, for a consideration of INR 4,500 crore subject to receipt of necessary regulatory approvals and customary closing conditions.
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 agreement envisages continuity of the current management team and investment processes at IDFC AMC, helping unitholders benefit from consistency in the high‐quality investment approach IDFC AMC is reputed for. This will be supplemented well by Bandhan’s brand as well as GIC’s and CC’s international network and experience which will aid IDFC AMC in further cementing its position in the asset management industry and propel further growth,” the bank said.
Speaking on the development, Anil Singhvi, Chairman of IDFC Limited said, “This transaction is a significant milestone in our plan of unlocking value and the consideration demonstrates the 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. The Bandhan consortium with its strong brand and resources will further strengthen the distribution of products and improve the overall experience for IDFC AMC’s investors and distributors.”
“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. The acquisition of IDFC AMC provides us with a scaled‐up asset management platform, with a stellar management team and a pan India distribution network. IDFC AMC could benefit significantly from the Bandhan brand and continue strengthening its position in the asset management industry. Also, we are happy to partner with marquee investors such as GIC & ChrysCapital and are confident that this venture will enhance value for all the stakeholders of Bandhan and IDFC AMC,” Karni S Arha, Managing Director, Bandhan Financial Holdings Limited added.
Talking about the acquisition deal, Choo Yong Cheen, Chief Investment Officer of Private Equity, GIC said, “GIC is pleased to continue our partnership with the Bandhan group and ChrysCapital through this new investment in IDFC AMC. We believe IDFC AMC is in a favorable position to capture the strong secular growth in the currently under‐penetrated Indian asset management industry.”
“ChrysCapital is very excited to partner with BFHL and GIC to buy out IDFC AMC, a quality platform with a seasoned management team. The Company is well poised for the future with strong industry tailwinds including increasing financialization of savings and a growing equity culture amongst the younger generation,” Ashish Agarwal, Managing Director, ChrysCapital added.
Citigroup Global Markets India Private Limited acted as the exclusive financial advisor and Cyril Amarchand Mangaldas was the legal advisor to IDFC Limited. JM Financial Limited acted as the exclusive financial advisor and Khaitan & Co and Trilegal as the legal advisors to the Bandhan consortium.