Money & Banking

Blackstone leads race for major stake in L&T MF

Surabhi/Palak Shah Mumbai | Updated on July 02, 2020 Published on July 01, 2020

Private equity firm Blackstone Group has emerged as the front-runner to acquire a significant stake in Mumbai-based L&T Mutual Fund. Stock broker and wealth management firm IIFL is also in the race but Blackstone’s bid is likely to be better, top sources told BusinessLine.

“Blackstone has the upper hand. L&T Finance has to decide on the bids it has received so far. Then, it will have to be approved by SEBI,” the sources said.

The transaction may be valued at ₹3,500-4,000 crore. Blackstone is hoping for a controlling stake in the company. According to the sources, the L&T Finance board may finalise the deal by August. The fund house had ₹58,012.2 crore worth assets under management and 28.93 lakh live folios as on May 31.

An IIFL spokesperson declined to comment on the deal but a source close to the company said it still had its hat in the ring and could negotiate a better deal if required. Blackstone declined to comment. Axis MF was also in the fray to acquire a stake in L&T MF but its offer was much lower than Blackstone’s, one of the sources said.

Tough market

Experts said foreign players have not been able to establish themselves in India’s MF industry, though many have tried in the past. Earlier, BlackRock exited mutual fund venture with DSP Group. JP Morgan sold its mutual fund business to Edelweiss and exited the segment.

The Franklin Templeton debacle is the most recent example of how foreign entities have tasted failure in the MF business in India, the experts said.

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Published on July 01, 2020
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