A long round of negotiations between Blackstone and L&T Finance Holdings for the sale of the L&T Mutual Fund has ended, sources told CNBC-TV18, and the bulky support private equity firm agreed to buy 100 percent of AMC for Rs 3,200 crore. .
An announcement of the deal is expected shortly.
The deal, provided it is completed, will be the first instance in which a foreign investor purchases a mutual fund company from India. This will make a nod from market regulator SEBI crucial and something to pay attention to, the sources said.
They added that Blackstone’s legal advisers are busy building a case for SEBI to approve the purchase of L&T Mutual Fund by the PE company, as the company is already a sponsor of commercial trusts in India.
L&T Finance, the parent company of L&T AMC, strengthened its fund business through the acquisition of Fidelity in 2012; acquired DBS AMC in 2009.
But the mutual fund business has been difficult for many companies, with the top 10 AMCs accumulating 84 percent of assets. The industry has more than 40 players, with L&T Mutual Fund, with assets of Rs 31,639 crore, ranking 13th, according to Morningstar data.
Settlement experts also indicate that the valuations on this deal could provide the benchmark for many other asset management assets waiting to be sold. Furthermore, if the market regulator allows Blackstone a full purchase of the L&T Mutual Fund, it could give a boost to the trading scene in this sector.
Blackstone, L&T Finance Holdings did not comment on CNBC-TV18’s query on the development of the deal.
