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L&T Finance Holdings to sell its mutual fund business to HSBC AMC - Mint

LT Finance Holdings will sell its mutual fund business LT Investment Management Ltd (LTIM) to HSBC Asset Management (India) Ltd for $425 million, the company informed the stock exchanges on Thursday.

"The divestment of mutual fund business is in line with the strategic objective of LT Finance Holdings of unlocking value from its subsidiaries to strengthen its balance sheet," it said.

Further, the acquisition of LTIM is in line with the strategic growth plans of HSBC in India, the company said, adding that HSBC stands to gain from an experienced team, diversified assets, strong retail customer base and the vast geographical reach that LT Mutual Fund has built over the year.

On Thursday, LT Finance Holdings shares rose 4.08% to close at 82.95 apiece on NSE.

“The transaction with HSBC is in line with our strategic objective of unlocking value from our subsidiaries which will help us to strengthen our balance sheet for our lending business. When seen alongside the recent capital raise it provides us with enough ammunition to increase the pace of retailisation in our lending portfolio, which is one of our long-term goals," said Dinanath Dubhashi, Managing Director CEO, LT Finance Holdings.

LT Investment Management is the 12th largest asset management company (AMC) in India and offers a basket of equity, fixed income and hybrid schemes to both retail and institutional investors.

An official statement said, HSBC intends to merge the operations of LTIM with that of its existing asset management business in India, which had assets under management (AUM) of 11,700 crore (US$1.6bn) as of September 2021.

JP Morgan and Citi were the financial advisors to LT Finance Holdings during the transaction while Cyril Amarchand Mangaldas acted as the legal advisors and PwC acted as due diligence and tax advisors.

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