Dutch asset manager Robeco Groep NV — a part of the European banking giant Rabobank Groep — will buy 49% stake in Canara Bank's asset management arm to gain a foothold in the country's robust mutual fund industry.
Robeco, which has assets under management (AUM) of 139 billion euros worldwide and posted operating profits of 233 million euros in 2005, will pay Rs 115 crore to Canara Bank for its stake in Canbank Investment Management Services Ltd (CIMS).
“The total valuation of our asset management entity is Rs 230 crore and 49% stake sale will bring about Rs 115 crore,” Canara Bank chairman and managing director MBN Rao told reporters after signing an MoU with Robeco.
“Reserve Bank has already given its assent to the proposed venture,” he said, adding that approval from market regulator Sebi and Foreign Investment Promotion Board (FIPB) would be sought soon.
Robeco's entry follows other Dutch companies such as ABN Amro and ING Group as well as a number of other US and European players like HSBC, Franklin Templeton, Prudential, Standard Chartered and Fidelity.
In all, India has 32 mutual fund players with total AUMs of more than Rs 3,50,000 crore. Canbank is a relatively smaller player with AUMs of about Rs 2,200 crore.
The asset management company, which would now be called Canara Robeco, aims to capture 5% market share in the next five years, Robeco Groep CEO George Moller said. “The JV would float five new products, especially equity based in the coming months,” he added.
Speaking on the occasion, finance minister P Chidambaram said: “We are pursuing goal of financial inclusion… one of important financial tools for achieving this is mutual funds.”
Source : IndiaTimes