he Reserve Bank of India has allowed Bandhan Financial Holdings Limited (BFHL) to invest in IDFC Asset Management Company Limited (IDFC AMC) and IDFC AMC Trustee Company Limited (IDFC TCL). In a letter dated October 20, the central bank mentioned that it has approved Bandhan’s acquisition of 60 per cent in IDFC AMC and IDC TCL for a quoted amount of Rs 2,700 crore and Rs 30 lakh, respectively.
According to the RBI notification, after this, BFHL may acquire an additional stake of up to 10 per cent each in IDFC AMC and IDFC TCL amounting to Rs 450 crore and Rs 5 lakh, respectively, in case one or more of the consortium partners are unable to purchase the shares under sale.
The consortium is led by Bandha Bank Ltd, the parent company of BHPL, and also includes Tangerine Investments, Singapore’s sovereign wealth fund GIC Pte Ltd and ChrysCapital. In April this year, the consortium won the bid to own IDFC.
As per the RBI’s note, Bandhan Bank cannot invest in the equity or debt capital instruments of IDFC AMC and IDFC TCL (investee companies) without its approval. It added that there shall not be any outflow of funds from the bank for the proposed acquisition directly or indirectly in form of credit exposure to the BFHL.
It also added that BFHL shall submit the details of its shareholding in the investee companies after the proposed acquisition.
Now, the acquisition proposal of IDFC units will need approval from the Securities and Exchange Board of India, as per a regulatory filing.
