Can you tell me about the plan of IDFC to hive off its mutual funds business?

The board of IDFC Ltd, the parent company, and IDFC Financial Holdings, approved the proposal to divest its mutual fund business. IDFC AMC currently manages over Rs.127,000 crore in AUM and is ranked among the top-10 funds in India in terms of total AUM. The board has already approved steps like appointment of investment banker. This was after shareholders of IDFC complained against the delay in monetizing assets of IDFC.

The plan is that once the non-core assets are hived off, the core IDFC will be merged into IDFC Bank through a process of reverse merger. The AGM of the company is scheduled to be held on 22 September and here it is expected to give a roadmap. IDFC Securities has sold off its securities business and the next step is to hive off the mutual funds business which is not central to its banking operations. It is likely to be value accretive with better focus.