Saurabh Nanavati (left) with Religare Enterprises Group CEO Shachindra Nath in Mumbai on Thursday. (Fotocorp)
Mumbai, Sept. 27: Invesco, the US-based investment management firm, is acquiring a 49 per cent stake in Religare Asset Management Company Ltd (RAMC) for around Rs 950 crore.
RAMC has a combined (onshore and offshore advisory) assets under management (AUM) of over $2.6 billion (Rs 14,600 crore) as of August 31.
The Religare group today announced that it was selling 49 per cent in its asset management arm to Invesco without disclosing the consideration paid. However, sources said it was in line with other industry deals that came between 5-6.5 per cent of AUM, which would value the company at around Rs 950 crore.
While RAMC is the asset management arm of Religare Enterprises Ltd, controlled by Malvinder and Shivinder Singh, Invesco has a presence in India through its affiliate WL Ross & Co. It also operates an enterprise centre in Hyderabad employing more than 600 staff who provide a range of global support functions, including IT, investment operations, finance, compliance and human resources.
Invesco president and CEO Martin L. Flanagan said the deal would be a win-win transaction for both the entities as it would enhance Invesco’s presence in the market, while Religare Mutual Fund would gain access to its broad range of investment solutions.
“Our agreement with Religare will expand the comprehensive range of investment capabilities Invesco provides to our retail and institutional clients around the world,” he said.
Religare Invesco Asset Management Company will be headed by Saurabh Nanavati (chief executive of RAMC) along with the existing management team.
J.P. Morgan acted as the exclusive financial adviser to Religare Enterprises on the transaction.
Shares of Religare Enterprises gained on the stock exchanges following the announcement. On the BSE, the share jumped nearly 4 per cent, or Rs 11.45, to end at Rs 330.
The Religare-Invesco transaction is not the only deal the domestic mutual fund industry has seen this year. In April, the UK’s largest asset management company Schroders picked up 25 per cent in Axis Mutual Fund. Though details of the transaction were not disclosed, Axis Mutual Fund was reportedly valued at over Rs 430 crore based on the transaction of 5 per cent of its AUM. Similarly, earlier this year,
Japan's Nippon Life Insurance bought a 26 per cent stake in Reliance Capital Asset Management, the country’s second-largest fund house for around Rs 1,450 crore.
Meanwhile, Religare Enterprises said that it is planning to raise $75 million (Rs 400 crore) through issue of convertible debentures to World Bank arm IFC. This effect will be considered by the board of directors of the company at a meeting on September 29.