KKR-controlled Avendus Capital In Final Negotiations To Buy IDFC’s Mutual Funds, Securities Units https://ift.tt/2Mmmh80

Avendus Capital, controlled by the US private equity giant KKR, is in final negotiations to buy IDFC’s Mutual Funds and Securities units.

IDFC is in final discussions with Avendus to sell its mutual fund business and broking business in a deal worth between 5,000 crore Rupees and 6,000 crore Rupees.

Avendus initially came forward to buy only the IDFC asset management business by making an offer of 3000-4000 crore Rupees. But, the KKR-controlled firm has now made a formal offer to buy both the mutual funds and securities units of IDFC.

Several other candidates including Reliance-Nippon and Yes Bank showed interest in the deal. However, Avendus has made a better offer. Both IDFC and Avendus Capital refused to make comments regarding the deal.

IDFC AMC ranks No 12 in the Indian mutual fund industry comprising of 42 members. The AUM (assets under management) of the AMC is about 69,000 crore Rupees as of June 2018. Out of the 69,000 crore Rupees, nearly 20,000 crore Rupees is in equities, and the remaining in fixed income.

IDFC Securities witnessed that its derivatives volumes increased by 57 percent and that its investment banking revenue increased by 453 percent year-on-year in 2017-2018.

Both the IDFC’s mutual funds business as well as the Securities business are profitable recording a net profit of 54 crore Rupees and 23 crore Rupees for March 2018, respectively.

This deal between the KKR-Controlled Avendus and the IDFC is expected to help Avendus to become a full-fledged financial services provider in India.

KKR, the New York-headquartered firm which has been investing in India since 2006, bought Avendus Capital two years back. Established as an investment advisory company by Gaurav Deepak, Kaushal Aggarwal, and Ranu Vohra in 1999, Avendus became popular with a sequence of fruitful technology deals, according to The Economic Times.

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