NEW DELHI: Online investment platform Groww is set to acquire the mutual fund business of Indiabulls group for Rs 175 crore. The proposed deal is subject to regulatory approvals from the Securities and Exchange Board of India.
After getting necessary approvals, Groww will become one of the first fintech companies to start its own asset management business after the capital markets regulator’s move to allow digital platforms to enter the mutual fund space.
Groww, which was founded in 2016, is backed by investors such as Tiger Global, Sequoia Capital India, Y Combinator, and Ribbit Capital. Analysts say that the entry of a technology-focused fund house could give investors more options and low-cost investment products in the segment. Indiabulls MF has assets under management of Rs 66,369 crore as of March-end.
“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 of its investment platform, with 1.5 crore customers, to expand its mutual fund business.
However, the distribution platform and the mutual fund business are likely to be run as separate businesses. According to a regulatory filing, the sale will be limited to Indiabulls Asset Management Company Limited (IAMCL) and Indiabulls Trustee Company Limited, trustee of IAMCL, while the Alternate Investment Fund will be demerged and retained by Indiabulls Housing Finance. Indiabulls Housing Finance said that it will narrow its focus on its real estate asset management business through AIF structures, as it looks to operate with an asset-light strategy going forward.