How does IDFC MF fit into the Bandhan Bank scheme of things?

The deal is final and Bandhan Financial Holding headed consortium has won the IDFC MF deal. While Bandhan Financial will have a 60% stake in IDFC MF, the other 2 members in the consortium viz. GIC Singapore and ChrysCapital will own 20% each. Once the deal is approved, it will be the largest deal in the Indian mutual funds space. Incidentally, SEBI is averse to foreign sovereign funds and venture funds buying AMCs, hence the consortium.

For Bandhan Financial, the holding company of Bandhan Bank, the deal is a logical extension to the financial inclusion goals of Bandhan group. This allows Bandhan group to enter India’s mutual fund business, with AUM of over Rs.38 trillion. This also boosts the mutual fund distribution business of Bandhan group. For IDFC, they can now unlock value as the IDFC AMC had already been identified as a non-core business with pressure to sell out.

IDFC happens to be among the top 10 Indian funds in terms AUM in the vicinity of Rs.1.21 trillion. It is the 9th largest fund in terms of AUM. This space is normally dominated by banks. Bandhan can leverage its strong distribution franchise and also gels with the micro empowerment of investors as well as financial inclusion. IDFC AMC offers top class management team and an all-India distribution network, to complement Bandhan Bank.