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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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Zomato acquires UberEats India for nearly Rs 2,500 crore

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New Delhi: Zomato on Tuesday announced that it has acquired Uber’s Food Delivery Business in India in an all-stock deal and Uber will have 9.99 per cent stake in the Deepinder Goyal-led food delivery platform.

According to sources close to the deal, it is in the range of over $350 million or nearly Rs 2,500 crore.

Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective from Tuesday.

“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” said Goyal, Founder and CEO, Zomato.

According to company sources, for the first three quarters of 2019, “our Uber Eats business comprised 3 per cent of our global Eats gross bookings, but was more than 25 per cent of our global Eats Segment Adjusted EBITDA losses”.

Uber started its food delivery service in India around mid-2017, but has not been able to scale up in the face of big players like Zomato and Swiggy.

It currently has nearly 26,000 restuarants listed on its platform from over 40 cities.

The market is piping hot as according to a recent study by business consultancy firm Market Research Future, the online food ordering market in India is likely to grow at over 16 per cent annually to touch $17.02 billion by 2023.

Uber CEO Dara Khosrowshahi said that the Uber Eats team in India has achieved an incredible amount over the last two years.

“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader,” said Khosrowshahi.

“We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success,” he added.

On January 10, Zomato had announced that it has secured $150 million in fresh funding from Ant Financial, a subsidiary of China-based giant Alibaba.

The latest round of funding in Zomato, which currently value the company at $3 billion, is part of $600 million funding round announced by Zomato CEO Goyal at a Delhi event last December.

The deal comes in the wake of merger talks between Zomato and Swiggy, whoch both the companies have denied to date.

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