MUMBAI: LIC Mutual Fund (LICMF) will acquire all the schemes of IDBI Mutual Fund.
As per the terms of the agreement between the two fund houses, LICMF will manage, operate, and administer all of IDBIMF’s schemes. Of the total 20 schemes of IDBI Mutual Fund, 10 schemes will be merged with LIC MF schemes. The Asset Under Management (AUM) of LICMF currently stands at Rs 19,700 crore while IDBI Mutual Fund manages assets worth Rs 3,800 crore.
The acquisition is likely to be completed by the end of July after which LICMF will manage, operate, and administer all the schemes of IDBI Mutual Funds. “10 schemes of IDBI Mutual Fund will be merged with the schemes of LIC Mutual funds. The take takeover process is expected to be completed by July end” TS Ramakrishnan, Managing Director and CEO of LIC Mutual Fund told this newspaper. “The unitholders of IDBI MF have been informed and they will be given the option to exit the schemes,” he added.
The unitholders of schemes opting for exit will not have to pay any exit load, according to the agreement. Schemes of the fund houses having similar features will be merged. “This is the acquisition of schemes and not the acquisition of entity (IDBI Mutual Fund),” clarified Ramakrishnan. IDBI Mutual Fund has sent e-mails to its unitholders explaining the details of the deal.
The letter contains the details regarding the proposed change in sponsorship, trusteeship, management, and administration of the IDBIMF schemes. IDBI Mutual Fund has sent a ballot form to unitholders to get their approval for this acquisition.
“The voting window will remain open from June 20, 2023, until July 19, 2023 (both days inclusive). All duly signed and filled-up ballot papers received by the Registrar and votes received electronically during this period will be accepted and considered, if found valid, for the purpose of determining the results of the ballot,” the letter said. Each unitholder will be entitled to one vote for every unit held.
LIC Asset Management Company (AMC) will act as the asset management for the schemes of IDBI MF, while LIC TC will act as the trustee company. Life Insurance Corporation of India (LIC) is the sponsor of LIC Mutual Fund and the parent entity of LIC AMC.