Religare to sell 49% stake in MF arm for about Rs 1,000 cr
Mumbai: Financial services major Religare group is selling 49 percent stake in its mutual fund arm RAMC to US-based investment management firm Invesco for estimated Rs 1,000 crore.
Without disclosing the deal value, Religare Enterprises said in a statement that Atlanta-based Invesco has entered into a definitive agreement to acquire 49 percent interest in Religare Asset Management Company (RAMC).
While the companies did not mention the deal value, sources privy to the transaction said that it could be in the range of about Rs 1,000 crore -- translating into about 6.5-7 percent of the total asset under management of RAMC.
RAMC is one of the top 15 asset management companies in India, with combined (onshore and offshore advisory) assets under management of over USD 2.6 billion (Rs 14,600 crore) as of August 31, 2012, and is present in 53 cities across India.
Invesco has a presence in India through its affiliate WL Ross & Co and also operates an enterprise centre in Hyderabad with a headcount of more than 600 staff.
"This addition will enhance Invesco?s presence in an important and growing market, while providing Religare's clients access to our broad range of investment solutions," Invesco President and CEO Martin L Flanagan said.
"Our agreement with Religare will expand comprehensive range of investment capabilities Invesco provides to our retail and institutional clients around the world, and further position both firms for long-term success," he added.
RAMC began operations in late 2008 has recorded almost a four-fold increase in its combined assets under management in the last four years.
It has also established its Portfolio Management Services (PMS) and Offshore advisory platforms in the last two years and achieved financial profitability in its third full year of operations (year ending March 2012).
Commenting on the deal, Religare Enterprises Group CEO Shachindra Nath said: "We are very pleased to bring a global asset manager of Invesco's repute to India as a partner in our asset management business.
"With a good three-year performance track record and solid revenue growth, we believe that both our retail and offshore businesses would be propelled to the next level of their growth journey," he said.
The joint venture, to be called Religare Invesco Asset Management Company, will be headed by Saurabh Nanavati (CEO, RAMC) along with the existing management team.
The transaction is subject to regulatory approvals and JP Morgan acted as the exclusive financial advisor to Religare.
Besides asset management, Religare group is present in life and health insurance, lending, broking, investment banking, and wealth management businesses.