HSBC will acquire the mutual fund business of L&T Finance Holdings for $425 million (Rs 3,250 crore). The deal values L&T Mutual Fund at 4.2% of its assets under management of Rs 78,273 crore at the end of September. Earlier this year, Sundaram Finance paid Rs 338.53 crore, amounting to 4.5% of assets under management, to acquire Principal AMC.
After completion of the deal, HSBC will merge the operations of L&T Mutual Fund with its existing asset management business in India.
“With an acquisition of this size, the asset management business will be a meaningful entity for HSBC in India,” said Value Research founder Dhirendra Kumar.
L&T Mutual Fund is ranked 12 out of 44 in the Indian mutual fund industry. Equity assets account for Rs 41,000 crore of the total cited above.
HSBC is at 23 with assets of Rs 11,314 crore, of which equity accounts for Rs 4,264 crore. L&T Mutual Fund has 2.4 million active folios, is empaneled with leading banks and has a presence in 65 locations.