L&T Finance Wealth’s 100 executives may not retain their jobs as IIFL has its own established 1,000 strong workforce
L&T Finance may sell its wealth management arm to IIFL Wealth and Asset Management (IIFL Wealth) in a Rs 250 crore deal, reports the Economic Times.
Moneycontrol could not independently verify the report.
IIFL Wealth, which as of March 31 handles assets worth Rs 169,000 crore, has emerged as the top buyer for L&T Finance Wealth Management, which manages assets worth Rs 25,600 crore, the report added.
The article quoted sources as saying that the Rs 250 crore figure could be lower than what was paid in recent deals. Beyond the transaction, L&T Wealth’s 100 executives may not retain their jobs as IIFL has its own established 1,000 strong workforce, the source added.
The valuation is approximately one percent of L&T Wealth’s assets under management (AUM). The development follows L&T’s intent to vacate non-core business areas, amid the multiple financial busts and consequent stringency by non-banking finance companies (NBFCs).
Smaller firms especially have suffered from SEBI’s regulatory clamp down on the segment and prevailing financial conditions."If a wealth management entity wants to survive, it can be done only by scale. The current fee structure of several products has made it unviable for many smaller firms," the Chief Executive of a Mumbai-based private wealth firm told the paper. Many more exits are expected from the space.