HSBC is in advanced and exclusive talks with L&T Finance Holdings to buy its mutual fund arm.
The sale of L&T Mutual Fund has been in the works for a while, people with direct knowledge of the development told Moneycontrol.
Earlier, private equity firm Blackstone was looking at finalising a deal to acquire L&T Mutual Fund, Moneycontrol reported. Blackstone proposed a deal at Rs 3,200 crore against the Rs 4,000 crore expected by the seller, but required the regulator’s approval.
The Securities and Exchange Board of India (SEBI) has in the past not been in favour of private equity firms owning a majority stake in mutual funds because of the short-term nature of these sponsor funds.
Blackstone’s big pitch point was that it already owns a real estate investment trust in India.
SEBI is preparing to roll out a discussion paper on the ‘Framework for PE firms to invest in Indian MFs,’ according to people aware of the matter.
Given the delay and the additional approvals required, L&T Finance Holdings has been engaged with HSBC about a possible sale of its mutual fund arm.
Moneycontrol reached out to the companies involved but they declined to comment.
“We do not comment on speculation,” L&T Finance Holdings said.
“No comment,” an HSBC spokesperson said.
“No comment,” Blackstone said.SEBI did not respond to Moneycontrol’s query on the deal.