Groww, which is among India’s leading investment platforms, will be taking over the mutual fund business of Indiabulls group for Rs 175 crore.
The transaction will only involve the mutual fund business of Indiabulls group. The alternate investment funds and portfolio management service businesses will still remain part of the Indiabulls group.
Once Groww gets approval from the Securities and Exchange Board of India (SEBI), it will be one of the first fintech companies to start its own asset management business.
The relaxation of eligibility criteria by SEBI has made it possible for fintech companies to apply for MF licenses.
The entry of a technology-focused fund house could give investors more options and low-cost investment products.
“With the capability to create products, we plan to make mutual funds even more accessible -- by making them simpler, more transparent, and by lowering the cost further,” said Lalit Keshre, chief executive officer and co-founder of Groww.
The company will also be able to take advantage its investment platform, which has 1.5 crore customers, to expand its mutual fund business. However, the distribution platform and the mutual fund business are expected to be run as separate businesses.
Groww, which was formed as a start-up back in 2016, is backed by investors Tiger Global, Sequoia Capital India, Y Combinator and Ribbit Capital.
Initially, Groww started out as a platform for investing in mutual funds, but recently it entered into stock broking as well.