Indiabulls Housing Finance on Tuesday said it will divest its mutual fund business to investment platform Groww for Rs 175 crore ($23.8 million) as the firm looks to focus on its core lending business.
Indiabulls Housing Finance said that it has decided to focus on its real estate asset management business through alternative investment fund (AIF) structures, in line with its asset-light strategy.
“Indiabulls Housing Finance will continue to build on its pedigree as a leading lender in the market and our AIF-driven real estate asset management business will complement our core business perfectly,” said Gagan Banga, vice-chairman and managing director of Indiabulls Housing Finance.
Indiabulls Group has been shedding assets in order to focus on its core business of lending. It sold its real estate development business to Embassy Group and divested some of its key land parcels.
The latest sale will be limited only to the mutual fund part of the asset management business, Groww said adding that AIF and portfolio management service businesses will be demerged from the existing company.
The mutual fund business, which accounts for 0.03% of Indiabulls Housing Finance's overall revenue, clocked Rs 4.16 crore in sales for the year ended March 2020.
Indiabulls Housing Finance has a net worth of over Rs 16,500 crore. The deal will be completed by June 30, 2022, the companies said.
Groww is among the largest mutual fund distribution platforms in the country, registering more than 2.5 lakh systematic investment plans monthly.
In April, it vaulted to the unicorn club after raising $83 million in its Series D round led by Tiger Global Management.
Bengaluru-based Groww is backed by marquee investors including Tiger Global, Sequoia Capital India, Y Combinator and Ribbit Capital.