The Reserve Bank of India has rejected Kerala-based Muthoot Finance’s proposal to acquire IDBI AMC.
Muthoot Finance today said that its request for a no-objection certificate was not acceded to by RBI on the ground that, “the activity of sponsoring a Mutual Fund or owning an AMC is not in consonance with the activity of an operating NBFC.
Consequently, Muthoot informed Sebi that it is unable to proceed with the proposed transaction.
Muthoot Finance Limited (MFIN), a Kerala-based gold loan NBFC, had signed a share purchase agreement to acquire IDBI Asset Management Limited and IDBI MF Trustee Company Limited in November 2019, for a consideration of around Rs 215 crore. Through this acquisition MFIN was planning to enter the Mutual Fund Asset Management space.
Promoted by IDBI Bank in 2010, IDBI Mutual Fund is a profit making AMC in the mutual fund space with an AUM over Rs 5,300 crore as of November 2019. It runs 22 schemes with a robust AUM across products, geography and investors.
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