State-run Bank of India said Thursday it has signed a pact with French multinational AXA Investment Managers Asia Holdings Pvt. Ltd to acquire its entire stake in their local mutual fund joint venture.
Bank of India will buy AXA’s 49% stake in BOI AXA Investment Managers Pvt. Ltd and BOI AXA Trustee Services Pvt. Ltd, it said in a stock-exchange filing. The bank currently owns 51% of the two units.
According to the terms, the bank will pay Rs 1,000 to buy AXA’s stake.
Bank of India said it expects the acquisition to help the mutual fund business to grow in scale by using the PSU’s brand and distribution strength.
The transaction is likely to be completed by the end of this month.
The mutual arm had assets under management of Rs 2,200 crore. It reported total turnover of Rs 25.45 crore for the last financial year ended March 2020.
According to media reports, AXA sounded out an exit from the JV last year after the mutual fund arm came under the spotlight when one of its debt funds wrote off its entire exposure to defaulter IL&FS Ltd in October 2018.
BOI AXA Credit Risk Fund, which held commercial papers of IL&FS worth over Rs 100 crore in its portfolio, had to take a 25% haircut on these holdings.
AXA’s exit comes almost a decade after Bank of India acquired a stake in the mutual fund arm from both Bharti Group and the French company in
2011. The business was renamed from Bharti AXA mutual fund to BOI AXA mutual
fund in 2012.
While AXA has fully exited its stake in the mutual fund JV, it continues as a public shareholder in Bhart AXA General Insurance Company Ltd, which recently received a nod from India’s insurance regulator to merge with ICICI Lombard General Insurance Company Ltd.
ICICI Lombard had agreed to acquire Bharti AXA General Insurance via an all-stock transaction in August.
Among other recent deals, White Oak Capital Management, a boutique investment management and advisory firm set up by former Goldman Sachs executive Prashant Khemka, acquired the mutual fund arm of troubled private-sector lender Yes Bank in August.