Acquiring 60% Stake in Invesco AMC, Hinduja Group Joins MF Industry

Acquiring 60% Stake in Invesco AMC, Hinduja Group Joins MF Industry
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On Tuesday, IndusInd International Holdings (IIHL) of the Hinduja Group announced its entry into the asset management industry by purchasing a 60% share in Invesco Asset Management India (IAMI), the domestic division of the US-based company Invesco.

The 17th-largest fund firm in India, Invesco Mutual Fund (MF), had average assets under management (AUM) of more than Rs 74,300 crore during the March quarter. Invesco claims that its India division oversees the management of about Rs 85,400 crore via offshore advisory and mutual fund schemes. For this reason, IIHL and Invesco have established a joint venture (JV). The latter will own 40% of the joint venture. The fund house will be sponsored by the two businesses.

The companies stated in a press release that regulatory approvals are pending for the purchase.
The fifth-largest private bank in India, IndusInd Bank, is promoted by IIHL. The agreement will improve Invesco MF’s distribution. “Both partners bring their respective strengths to the venture with Invesco’s portfolio of global products and processes, and IIHL facilitating a strong distribution network of 11,000+ pan India touch points and 45 million customer base,” the release stated.

The purchase of Invesco demonstrates Hinduja Group’s intention to operate throughout the whole financial ecosystem. Following its successful resolution application under the Insolvency and Bankruptcy Code to buy Reliance Capital, the group went on to seize control of several businesses inside the struggling financial services company, including asset reconstruction, life, general, and health insurance, and broking.

Amidst increasing investor awareness, the mutual fund industry in India has witnessed a number of new entrants over the past few years, namely fintechs and portfolio management services. Zerodha, Groww, Bandhan, Samco, Helios, and Old Bridge are among the new participants. They got in by way of new acquisitions or licenses. In a joint venture with BlackRock in the US, Jio Financial has also sought for an MF license; it is still awaiting approval from the authorities. The industry currently has forty-five participants. With the AUM doubling over the last four years, the money market business has experienced significant development in the post-Covid era. The statistics from the Association of Mutual Funds in India indicates that the average AUM has increased to Rs 54 trillion from Rs 27 trillion in Q4FY20.

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