Both the companies have entered into a definitive agreement whereby HSBC AMC will acquire 100 per cent equity shares of L&T Investment Management Ltd, a wholly owned subsidiary of L&T Finance Holdings.
In another consolidation in the mutual fund segment, L&T Finance Holdings has proposed to sell its mutual fund business, L&T Investment Management Ltd (LTIM), to HSBC Asset Management (India) Ltd for $425 million (around Rs 3,200 crore). LTIM will eventually be merged with HSBC’s asset management business in India.
Both the companies have entered into a definitive agreement whereby HSBC AMC will acquire 100 per cent equity shares of L&T Investment Management Ltd, a wholly owned subsidiary of L&T Finance Holdings (LTFH), which is the investment manager of L&T Mutual Fund.
L&T MF has assets under management of Rs 80,000 crore. HSBC intends to merge the operations of LTIM with that of its existing asset management business in India, which had assets under management (AUM) of Rs 11,700 crore as of September 2021.
LTFH will also be entitled to excess cash in LTIM until the completion of the acquisition. “The transaction is subject to the requisite regulatory approvals. Both LTIM and HSBC AMC will work to ensure that there will be continuity of services to their investors and counter-parties in the interim,” LTFH said in a statement.
The divestment of the mutual fund business is in line with the strategic objective of L&T Finance Holdings of unlocking value from its subsidiaries to strengthen its balance sheet, it said.
Dinanath Dubhashi, MD & CEO, L&T Finance Holdings, said, “The transaction with HSBC is in line with our strategic objective of unlocking value from our subsidiaries which will help us to strengthen our balance sheet for our lending business…”
