Money & Banking

Flipkart co-founder Bansal in talks to acquire Essel MF

Suresh P Iyengar Mumbai | Updated on July 18, 2019 Published on July 18, 2019

Flipkart co-founder Sachin Bansal is in talks with the Subhash Chandra-promoted Zee Group to acquire Essel Mutual Fund, a subsidiary of Essel Finance.

In April, Srei Infrastructure Finance said its subsidiary Srei Mutual Fund Asset Management entered into a preliminary non-binding term sheet for the acquisition of Essel Mutual Fund.

However, the talks were believed to have failed due to differences over valuation, and this led to the entry of Bansal.

As of June-end, the average assets under management of Essel Mutual Fund were at ₹1,040 crore.

Having sold his stake in Flipkart for over $1 billion (₹6,800 crore), Bansal has been scouting for investment in start-ups with interest in the financial sector. He recently invested ₹200 crore in the non-convertible debentures issued by Piramal Enterprises, which will invest in financial services sectors.

Earlier this year, Bansal — through his investment arm BAC Acquisitions — had infused ₹250 crore each in two non-banking financial companies: Altico Capital India and IndoStar Capital Finance.

Apart from the financial sector, Bansal had also recently invested in ride-hailing unicorn Ola and electric bike start-up Ather Energy.

Debt repayment

The Zee Group has been monetising its assets to mop up ₹20,000 crore in the next six months to meet its debt obligations.

The group has defaulted on its bond repayment, and has sent the mutual fund industry, which had subscribed to its bonds, into a tizzy. The Essel Group has a debt of ₹17,174 crore, of which ₹11,466 crore is related to infrastructure projects.

Published on July 18, 2019
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