Chennai: Gold loan company Muthoot Finance has acquired stakes in IDBI Asset Management and IDBI MF Trustee Company.
In a clarification made to the National Stock Exchange on the divestment of its stake in these companies, IDBI Bank said: “The buyer is Muthoot Finance which is a leading gold financing NBFC in India and has approximately 4,500 branches spread across the country. The buyer does not belong to the promoter/ promoter group/group companies”.
However, the bank did not specify the stake purchased by Muthoot Finance. When contacted, Muthoot Finance refused to comment on the development.
On November 8, the IDBI Bank said that its board had approved sale of its entire stake in IDBI Asset Management.
As on 31 March 2019, IDBI Bank owned 66.67 per cent stake in IDBI Asset Management with IDBI Capital Markets and Securities holding a 33.33 per cent stake, as per reports. The bank has been reportedly planning to divest non-core businesses as it is burdened by bad loans.
IDBI Asset Management’s total assets under management (AUM) had fallen 16 per cent year-on-year to Rs 6,238 crore in FY19. The company reported a loss of Rs 4.34 crore in FY19 from a year-earlier profit of Rs 8 crore. Revenue from operations fell 25 per cent YoY to about Rs 60 crore.
Muthoot Finance had raised $450 million in its maiden offshore bond issue from investors across the US, Asia and Europe in October. “This fundraise will enable us in further diversifying and strengthening our sources of funding,” M.G.George Muthoot, Chairman of Muthoot Finance had then said.
