IndusInd gears to secure majority stake in Invesco mutual funds

IndusInd International Holdings Ltd (IIHL), supported by the Hinduja Group, is gearing up to make an entrance into India's mutual fund sector. Talks have been underway for over nine to ten months for IIHL to acquire a majority stake in Invesco Mutual Fund, the Indian subsidiary of the global investment firm based in the United States, according to industry insiders familiar with the matter.

The proposed deal structure outlines IIHL's intention to secure a 60 percent stake in Invesco MF, with the remaining 40 percent to be retained by the Invesco Group. This strategic move aligns with IIHL's overarching vision of establishing itself as a significant player in the global financial services domain.

Sources anticipate an official announcement and signing of the agreement in the forthcoming weeks. Post-acquisition, IIHL intends to maintain continuity in management, keeping Saurabh Nanavati as the current CEO of Invesco MF.

The impending transaction not only bolsters the Hinduja Group's aspirations in the banking, financial services, and insurance (BFSI) sector but also complements IIHL's recent resolution plan for Reliance Capital, which received approval from the National Company Law Tribunal (NCLT).

Motilal Oswal Financial Services is facilitating the deal as the financial advisor, adding weight to the strategic significance of the acquisition.

In a bid to fortify its position in the BFSI segment, the Hinduja Group, led by AP Hinduja, disclosed plans to evaluate potential targets, aiming for comprehensive coverage in the sector. With aspirations of achieving a valuation between $35 billion to $40 billion in the BFSI space by 2030, the group remains poised for strategic acquisitions.

As of July 3, 2023, IIHL boasted a net asset value of $1.67 billion, signaling its robust financial standing and determination to emerge as a global financial powerhouse. Plans for a potential listing are underway to provide shareholders with a trading avenue.

In recent years, the mutual fund sector has witnessed notable transactions, including Sundaram Mutual Fund's acquisition of Principal Mutual Fund, HSBC AMC's purchase of L&T Mutual Fund, and a consortium led by Bandhan Bank clinching the deal for IDFC Mutual Fund.

As for Invesco Mutual Fund's background, it entered the Indian market in 2013 through a partnership with Religare Securities Ltd., subsequently acquiring full ownership in 2016 and rebranding it as Invesco Mutual Fund. With an average asset base exceeding Rs 74,534.42 crore, Invesco MF stands as the 17th largest asset manager in India, catering to diverse investment needs.

The firm boasts a workforce of 214 employees and an extensive network of distributors spanning 40 cities across the country, emphasizing its robust presence in the Indian financial landscape.