Oct 12, 1999|
Now mutual funds are eyeing the M&A route
According to news reports in a leading business daily, mutual funds (MFs) are exploring the mergers and acquisitions (M&A) route for expansion and consolidation.
That M&As are gaining prominence can be gauged from TCK Finance's (Calcutta) buyout of B.H. Kothari's stake in Kothari Pioneer MF. Industry sources claim that this could set the ball rolling for other MFs to acquire/merge in a bid to expand. The Securities and Exchange Board of India (SEBI) has been receiving inquiries from a number of potential MFs as to whether it would be quicker for them to take over an existing asset management company (AMC) which has been awarded a licence for MF business or start a new one.
Industry sources disclose that four to five MFs who have got licences but are having second thoughts on entering the business, are up for grabs.
The consolidation process seems inevitable with the entry of foreign banks (HSBC, ABN Amro, ANZ Grindlays) and foreign insurance majors in the MF industry. Moreover global majors like Fidelity, Old Mutual are eyeing the Indian MF scene. HDFC, which has the potential to become the largest MF after Unit Trust of India (UTI), is also planning to leverage its large client database and distribution network by breaking into MFs.
With several large MFs outlining ambitious plans to corner a share of the MF pie, small and mid-sized companies will get marginalised, and become prime targets for acquisitions/mergers. It makes sense for the smaller local MFs to merge with a larger, global MF. The global MF will bring with it expertise, technology and a brand name, which combined with the local MF's research capabilities and understanding of local markets can prove to be a successful combination. In addition to the small MFs, even MFs operating in niche areas can explore the M&A route for consolidation.
More Views on News
Mar 10, 2016
An opportunity to find an impeccably trustworthy and competent financial guardian is in the offing.
Feb 29, 2016
Most financial planners come out as whiz kids who throw around financial jargon. But financial planning can be actually easy, provided one follows a disciplined approach.
Feb 12, 2016
PersonalFN highlights the benefits of parking a portion of your expenses in e-wallets and using them efficiently.
Feb 2, 2016
Mutual funds take a bearish call on the FMCG sector. The sector has started playing out due to a combination of slower growth and expensive valuations.
Feb 1, 2016
Ethical practices help build long lasting relationships, and healthy long-term business relationships are often mutually rewarding. But PersonalFN is of the view that the financial services industry in India seems to have forgotten this.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407