Hinduja Group's IIHL in talks to acquire majority stake in Invesco AMC

As of July 3, 2023, IIHL, which has a vision of becoming a global financial services institution, had a net asset value of $1.67 bn

IndusInd International Holdings Ltd ( IIHL), backed by the Hinduja Group, is planning an entry into the Indian mutual fund sector and has held discussions to acquire a majority stake in Invesco MF, the Indian arm of the US-based global investment firm, multiple industry sources in the know told Moneycontrol.

"This is part of IIHL's big BFSI push. The proposed transaction has been in the works for more than 9-10 months and has now entered an advanced stage. As per deal terms, IndusInd International Holdings Ltd ( IIHL), the promoter of IndusInd Bank is looking to acquire a majority stake of 60 percent stake in Invesco MF, with the Invesco Group planning to continue to hold the balance 40 per cent stake ," said one of the persons above.

A second person told Moneycontrol that an official signing and announcement on the deal can be expected in the coming weeks and post the buyout of a controlling stake in the target firm, the plan is to continue with the same management and retain the current CEO Saurabh Nanavati.

"For the Hinduja Group, the deal works for their BFSI aspirations and Invesco MF fits in with their desired portfolio, especially after IIHL's resolution plan for Reliance Capital was approved by the NCLT," a third person said.

"Motilal Oswal Financial Services is acting as the financial advisor for this deal," a fourth person familiar with the deal told Moneycontrol.

All the four persons above spoke to Moneycontrol on the condition of anonymity.

Email queries sent to the Hinduja Group, Invesco US, Invesco MF and Motilal Oswal Financial Services were left unanswered at the time of publishing this article despite reminders and text messages.

This article will be updated as soon as we hear from any of the parties.

In June 2023, the Committe of Creditors had approved the Rs 9,660 crore bid of the Hinduja Group, with IIHL as the acquiring entity, for Reliance Capital ( present in insurance, asset reconstruction and broking) under the insolvency process. The RBI and CCI have given the nod to the deal.

Later the board of IIHL approved a capital raise of $1.5 billion for twin purposes - to increase its shareholding in IndusInd Bank to 26 per cent from 15 per cent and to fund the Reliance Capital acquisition.

On October 25, 2023, AP Hinduja, Chairman, Hinduja Group ( India)  told Moneycontrol in an interview at Carlton House Terrace, London, UK that the group is evaluating targets, looking to fully cover the BFSI segment and eyeing a valuation of $35 billion to $40 billion in the space by 2030.

"We are looking into it. We are under due diligence. And I'm hopeful, as I said, that during this financial year by March, we'll be able to announce one or two such acquisitions," he shared without elaborating further.

As of July 3, 2023, IIHL, which has a vision of becoming a global financial services institution, had a net asset value of $1.67 billion and has plans to list to give a trading option to its numerous shareholders.
In the past few years, Sundaram MF's buyout of India's oldest MF player Principal MF, HSBC AMC's $425 million purchase of L&T MF and a Bandhan led consortium winning the race for IDFC MF have been some of the transactions in the sector.

MORE ABOUT INVESCO INDIA

Invesco, a US-based fund house, entered India back in 2013 in partnership with Religare Securities Ltd. to form Religare Invesco Asset Management Co. Ltd. The former owned a 49 per cent stake in the asset management company, with the rest being held by the latter.

In April 2016, Invesco bought the remaining 51 per cent of shareholding owned by the co-sponsor Religare and renamed it as Invesco Mutual Fund.

According to its website, with an average asset base of over Rs 74,534.42 crore (for the quarter ending Dec 2023), Invesco Asset Management (India), the 17th largest asset manager in the country, aims to serve investment needs of individual investors, corporate and institutions through mutual funds and sub-advised portfolios.

The split is as follows - MF AUM – Rs 63,627 crore  PMS – Domestic – Rs 738 crore and PMS – Offshore Advisory – Rs 10,169 crore.

According to the latest corporate presentation on the firm's website, it has 214 employees, 15,50,511 active customer folios and 38,840 empanelled distributors with a presence across 40 cities in India.