Bandhan-led group to buy IDFC MF, deal valued at Rs. 4,500 crore

Bandhan Financial Holdings won the bid to buy IDFC Asset Management Company in a deal valued at 4,500 crore, marking the entry of a financier that began its life as a bottom-of-the-pyramid lender into the ritzy business of asset management dominated by bulge-bracket financial groupings such as ICICI, HDFC and the State Bank of India. This is the largest deal to date in the Indian asset management space.

The consortium led by the Kolkata-based owner of Bandhan Bank trumped the US based Invesco that partnered with buyout firm Warburg Pincus and Kedaara Capital, paying 3.6% of the assets under management. The winning group includes Lathe Investments Pte. Ltd, an affiliate of Singapore sovereign wealth fund GIC, and local private equity fund ChrysCapital.

JM Financial was advising the Bandhan-led consortium in the deal.

Addition of mutual funds business to Bandhan’s portfolio of tiny, small- ticket and housing loans would improve its ability to cross sell financial products to millions of customers who do not have access to savings instruments.