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Muthoot Finance to acquire IDBI Mutual Fund for Rs. 215 crore

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Mumbai: Gold loan provider Muthoot Finance  Muthoot Finance (MFIN) on Friday said that it has entered into a definitive agreement to acquire IDBI Asset Management and IDBI MF Trustee Company, paving the way for Muthoot Finance’s entry into the mutual fund asset management space.

The business will change hands for Rs 215 crore, with the buyer assigning the fund a value of 4 per cent of the total assets managed. Promoted by IDBI Bank in 2010, IDBI Mutual Fund is one of the profit making AMCs with assets of Rs 5,348 crore. The transaction is expected to be completed by February 2020

Promoted by IDBI Bank in 2010, IDBI MF is one of the profit making companies in the mutual fund space with Assets Under Management (AUM) of approximately Rs 5,300 crore.

“We are excited to venture into this new path in the financial services space,” said George Alexander Muthoot, Managing Director of Muthoot Finance. “We are equally excited to partner with the strong, experienced and enthusiastic management team at IDBI Mutual Fund as we embark upon the next level of our journey.”

IDBI MF runs 22 schemes with robust AUM across products, geography and investors.
Muthoot Finance said it would purchase 100 percent equity shares in both companies for Rs 215 crore.
The Indian mutual fund industry has been one of the fastest growing businesses in the past five years. Assets under management have increased from Rs 10.96 lakh crore in October 2014 to Rs 26.33 lakh crore in October 2019, a 2.5x rise in a span of 5 years.

Earlier this year, Reliance Capital sold its asset management business to Nippon Life Asset Management, while Toronto based Manulife picked up a 49 per cent stake in Mahindra Asset Management. Bank of Baroda and BNP Paribas AMC AMC have also decided to merge their asset management arms.

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Reliance and bp launch ‘Jio-bp’ partnership for fuel retailing.

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Reliance BP Mobility Limited aims to expand from Reliance’s current fuel retailing network of over 1,400 petrol pumps to up to 5,500 over the next five years.

Reliance Industries Ltd (RIL) and British Petroleum (BP) on Thursday announced the start of their new Indian fuels and mobility joint venture, Reliance BP Mobility Limited (RBML).

Following initial agreements in 2019, BP and RIL teams have worked closely over the past few months in a challenging environment to complete the transaction as planned, a joint statement said.

BP has paid RIL $1 billion for a 49 per cent stake in the joint venture, with RIL holding 51 per cent.

“Operating under the “Jio-BP” brand, the joint venture aims to become a leading player in India’s fuels and mobility markets. It will leverage Reliance’s presence across 21 states and its millions of consumers through the Jio digital platform,” the statement said.

BP will bring its extensive global experience in high-quality differentiated fuels, lubricants, retail and advanced low carbon mobility solutions, added the statement.

BP and RIL expect the venture to grow rapidly to help meet India’s fast-growing demands for energy and mobility.

RBML aims to expand from its current fuel retailing network of over 1,400 retail sites to up to 5,500 over the next five years. This rapid growth will require a four-fold increase in staff employed in service stations, growing from 20,000 to 80,000 in this period. The joint venture also aims to increase its presence from 30 to 45 airports in the coming years.

Mukesh Ambani, Chairman and Managing Director of RIL said: “Reliance is expanding on its strong and valued partnership with BP to establish a pan-Indian presence in retail and aviation fuels. RBML will aim to be a leader in mobility and low carbon solutions, bringing cleaner and affordable options for Indian consumers with digital and technology being our key enablers”.

Bernard Looney, CEO of BP said that India has been leading the way with innovations in digital technology, value engineering and new energy solutions and it will require more energy for its economic growth and, as it prospers, its needs for mobility and convenience will accelerate.

“BP has a proud history in India spanning over a century. We are honoured to be a strategic partner with Reliance – India’s most valuable company – and pleased that our partnership has grown in both substance and spirit over this past decade. Reliance’s digital capabilities, technical expertise and reach complement our international fuels and service offers,” he said.

RBML has received the marketing authorization for transportation fuels, amongst other necessary regulatory and statutory approvals. The joint venture will begin selling fuels and Castrol lubricants with immediate effect from its existing retail outlets, which will be re branded to “Jio-BP” in due course, the statement said.

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