Groww, the online investment platform, will be taken over by Indiabulls Mutual Fund for a total consideration of Rs 175 crore.
According to the company statement, Groww will buy Indiabulls Asset Management Company (IBAMC) and the trustee company for Rs 175 crore, which includes a cash and equivalent component of Rs 100 crore. The transaction is subject to regulatory approvals.
The statement also mentions that from the existing IBAMC structure the Alternate Investment Fund (AIF) and Portfolio Management Service (PMS) businesses will be demerged and remain under Indiabulls Housing Finance.
Selling the Mutual Fund will help the parent Indiabulls Housing Finance's capital position. Groww has over 1.5 crore customers who use the platform to invest in mutual funds, stocks and exchange-traded funds (ETFs) and wishes to increase the retail participation in equity.
"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," Lalit Keshre, the Chief Executive and co-founder of Groww, said.
Indiabulls Housing Finance plans to grow its Real Estate Asset Management business through AIF structures in line with its asset-light strategy. While IBHFL will focus largely on retail disbursements, the AIF structure will be used for the wholesale opportunity of early-stage project finance, the statement said.
"We have made the decision to divest our interest in the retail mutual fund business to be able to consolidate capital and provide greater focus in building the company's real estate asset management business by way of Alternate Investment Fund, in line with the company's asset-light strategy," Gagan Banga, the Vice Chairman and Managing Director of Indiabulls Housing Finance, said.
