Bharti may exit Bharti-AXA Mutual Fund

Bharti-AXA Mutual Fund is most likely to sell its stake to Bank of India and the deal is to be finalised in the next one month.

Written by Fe Bureau

Mumbai | December 24, 2010 12:22 AM IST

3 min read

Bharti-AXA Mutual Fund is most likely to sell its stake to Bank of India and the deal is to be finalised in the next one month. Earlier,public sector banks like Central Bank and Indian Overseas Bank were reported in the race to buy the stake in the mutual fund house.

According to the market participants,Bharti Enterprises which holds 25% stake in the venture is likely to exit from the mutual fund business. Sandeep Dasgupta,CEO of Bharti AXA investment manager said,We are looking for a banking partner,but I can’t comment whether it will completed within the next month,as there are several processes to go through. He didn’t comment on the share price at which Bharti will exit the business. You will know it once the deal is done, he said.

For the last two years,Bharti-AXA MF was looking for a partner to expand its asset management business,but talks were put on hold following financial meltdown of 2009. A senior official close to the development said,valuations are still being worked-out as Bank of India is planning to buy more than 25% stake in the fund house.

Market participants say that,with current regulatory environment in the mutual fund industry,banks are turning out to be a crucial link to sell mutual fund products. We are witnessing a trend in which a fund house are increasingly partnering with banks with pan-India presence to sell mutual fund products, said a CEO of the leading fund house on condition of anonymity. Banks are already the largest among various category of mutual fund distributors,he added. Bank of India currently has over 3,300 branches across the country which can help to attract more investors.

In 2010 IDBI mutual fund entered the mutual fund business,while Union Bank along with KBC asset management is also planning to come out with its mutual fund business. In the past Bank of India had started its mutual fund business in 1990 and later in 2004 they had offered exit option for their investors in which they had redeemed four of their schemes and transferred two schemes to Taurus Mutual Fund.

In 2009 we had seen T Rowe Price buying 26% in UTI mutual fund,while Nomura Asset Management had bought 35% stake in LIC Mutual Fund and L&T Finance had acquired 100% stake in DBS Cholamandalam. Recently,Daiwa Group also bought stake in Shinsei Mutual Fund.

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