IDFC board approves divestment of mutual fund business
The Board of Directors of IDFC Ltd and IDFC Financial Holding Company Ltd (IDFC FHCL) at their meetings held on Friday considered and approved to initiate steps to divest the mutual fund business — IDFC Asset Management Company (IDFC AMC) Ltd.
IDFC AMC is the direct subsidiary of IDFC FHCL and indirect subsidiary of IDFC. As on March 31, 2021, IDFC held 99.96 per cent in IDFC AMC.
IDFC AMC’s average assets under management (AAUM) for the June quarter was at ₹1,26,070 crore, as per AMFI data.
IDFC, in a regulatory filing, said the disinvestment is subject to requisite regulatory approvals, as applicable.
The Boards have authorised respective Strategy & Investment Committees to take necessary steps, including appointment of Investment Banker, for the same, as per the filing.
IDFC losing investor confidence over delay in value unlocking
At a pre-annual general meeting conference call held on September 14, investors expressed disappointment with the slow pace of progress of the disinvestment.
While one investor wanted IDFC to immediately divest its stake in its asset management company (AMC), failing which he said he will reach out to other investors to seek a change in management; another investor, referring to the performance of the stock, alleged value destruction for shareholders.
RBI approves re-appointment of Vaidyanathan as IDFC FIRST Bank chief
Vinod Rai, Non-Executive Chairman, IDFC, explained that it has taken the company the last 3-4 years to try and simplify the entire corporate structure and it has managed to remove all the other entities, except the Bank, AMC and the Foundation.
“Now, what we are grappling with today is the IDFC Foundation. It has two joint ventures under it — one is with the Government of Delhi and another is with the Government of Karnataka.”
In his statement to the shareholders in the latest annual report, Rai observed that in pursuit of creating maximum value for shareholders, over the last few years the Board has been focused on cleaning up the corporate structure of the IDFC Group, while awaiting the expiry of the 5-year lock in period for the Group as promoter of IDFC FIRST Bank.
The Reserve Bank of India vide their letter dated July 20, 2021, has clarified that after expiry of the ‘lock in’ period of five years, IDFC can exit as promoter of IDFC FIRST Bank.