L&T Finance Holdings is in active talks with financial services giant HSBC about the possible sale of L&T's mutual fund arm, Moneycontrol reported citing sources.
Last year, private equity major Blackstone was also engaged in talks with L&T Finance to buy its mutual fund business for a Rs 3,200 crore deal.
However, it did not materialise as market regulator Securities and Exchange Board of India did not give its nod because of the nature of the deal. SEBI does not favour private equity firms owning a majority stake in mutual funds due to their short-term nature.
L&T Finance wants to sell its mutual fund business to monetise non-core businesses. L&T's mutual fund arm is a subsidiary of L&T Finance Holdings Limited. The company has over Rs 75,531 crore quarterly- average assets under management as of June 30, 2021.
Its MF basket comprises 35 funds, including 12 open-ended equity schemes, 12 open-ended debt/fixed income schemes, five hybrid schemes and six close-ended schemes.
Both HSBC and L&T Finance Holdings are yet to issue any statement on the matter.
L&T Finance had reported a 20 per cent rise in net profit at Rs 178 crore for June quarter 2021-22, mainly driven by rural demand for farm equipment. The non-banking financial company registered Rs 148 crore profit in the year-ago period.
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