Groww completes Rs 175 crore acquisition of Indiabulls’ mutual fund business

This comes almost two years after Groww inked a definitive agreement in May 2021 to acquire the mutual fund business of IBHFL’s subsidiaries Indiabulls Asset Management Company Ltd (IAMCL) and Indiabulls Trustee Company Ltd (the trustee of IAMCL).

The sale of Indiabulls Asset Management Company was limited only to the mutual fund part of the business. The alternate investment fund has been retained by Indiabulls Housing Finance.

“In furtherance to the intimations, please note that the Company has received all necessary approvals in relation to the transaction. Further, the closing date of the transaction is May 3, 2023 and the company does not have any control or shareholding in IAMCL and ITCL subsequent to the closing date,” Indiabulls Housing Finance said as a part of its exchange filing.

The deal also included a cash equivalent of Rs 100.62 crore, to be invested by Groww.

The transaction received a green light from competition regulator Competition Commission of India’s (CCI) in September 2021.

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Head start against Zerodha

With this, the Tiger Global and Sequoia-backed company will now be able to launch and manage its own mutual funds, giving it an early start against competitor Zerodha, which is still awaiting a final licence from market regulator Securities and Exchange Board of India (Sebi).

Groww has raised $393 million till date and was last valued at $3 billion after raising $251 million in October 2021 in a round led by ICONIQ Growth.

Zerodha, India’s largest brokerage in terms of the number of customers, already has initial (in-principle) clearance for an asset management company (AMC) from Sebi, which it received back in 2021.

Last month, Zerodha founder and chief executive Nithin Kamath said that his firm has formed a joint venture (JV) with wealth management platform Smallcase for the mutual fund business. Smallcase was incubated in Zerodha’s startup incubator, Rainmatter. The brokerage firm, through Rainmatter, is also an investor in Smallcase.

In the past, Zerodha’s Kamath had made it clear that the AMC would focus on passive products, which have been increasing their share of the equity assets pie in the country. It will be launched two to three months after the final licence comes in, Kamath had said.