Indiabulls Housing Finance announced it will exit the mutual fund business to focus its management bandwidth and consolidate capital towards its core lending business. To this end, the housing finance company said it will sell its entire stake in mutual fund subsidiary to Nextbillion Technology, a part of the Groww Group, for a sum of Rs 175 crore.
Under the deal, Groww will acquire Indiabulls Asset Management Company Limited (IAMCL) and its trustee, Indiabulls Trustee Company Limited (ITCL). The Rs 175-crore deal will include cash and cash equivalent of Rs 100 crore, as on closing date, Indiabulls said in a regulatory filing on Tuesday.
"The Company along with its wholly owned subsidiary companies Indiabulls Asset Management Company Limited (IAMCL) and Indiabulls Trustee Company Limited, Trustee of IAMCL, (ITCL) has executed definitive transaction document with Nextbillion Technology Private Limited, part of Groww Group, to divest its entire stake in mutual fund business, being carried out by IAMCL & ITCL to the Groww at an aggregate purchase consideration of Rs 175 crore (including cash and cash equivalents of Rs 100 Crore, as on closing date), subject to necessary approvals, as may be required in this regard," the housing financer said in its filing.
The move is meant to help Indiabulls Housing Finance focus on its real estate asset management business through AIF structures in line with its asset-light strategy. The real estate asset management business is complementary to the core business of the Company and the sponsor plans to grow this business in partnership with global players.
Indiabulls said it expects to conclude the deal, subject to agreement between both parties, by June 30, 2022. Post conclusion of the transaction the company will cease to hold any equity shares and its sole control over IAMCL and ITCL, it further added.
Nextbillion Technology, part of the Groww Group, is a SEBI-registered stock broker, depository participant and AMFI-registered mutual fund distributor. Groww commenced its financial services business in May 2016 and currently is among the leading tech platforms for investing inter alia in stocks and mutual funds.
Headquartered in Bangalore, Groww is backed by marquee investors including Tiger Global, Sequoia Capital India, Y Combinator and Ribbit Capital. Groww is presently serving over 1.5 crore users across more than 900 cities in India.
Groww is not related to any promoter, promoter group or group companies of Indiabulls Housing Finance, the company clarified.