Religare Enterprises to buy Lotus India

Mumbai: Religare Enterprises (REL) has agreed to acquire Lotus India Asset Management Company from the majority shareholders, Alexandra Fund Management, an affiliate of Singapore-based Fullerton Fund Management Company Ltd and India-based Sabre Capital.

Religare, which confirmed the development, did not provide financial details of the deal. However, they said it is not a share-swap deal.

Analysts estimate the deal size at anywhere between Rs 50 crore and Rs 150 crore.

Lotus India Mutual Fund’s assets under management are worth Rs 5,457 crore (as on end of October). The asset base for the mutual fund fell by more than 30 per cent in the October quarter.

Religare Enterprises, owned by the former promoters of drug major Ranbaxy, and Netherlands-based AEGON Group, have a mutual fund joint venture, Religare AEGON Mutual Fund, which is yet to launch its first scheme.

“It is a great time to enter the market as Lotus already has a base, and this will complement our business,” said the official spokesperson from Religare Enterprises.

Religare will infuse additional funds into the schemes of Lotus India AMC, he said.

“We are pleased to transfer ownership to a leading financial services brand such as Religare with its strong reach and distribution might,” said Mr Gerard Lee, CEO of Fullerton Fund Management.

Lotus India AMC currently operates out of 60 cities.

The reason for the acquisition is not clear, especially with the kind of times the industry is in, said a fund manager of another firm. Also, with Lotus having a majority of its schemes in the liquid and FMP categories, matters could be a little uncertain as these schemes have been facing high redemptions due to the liquidity crunch, he added.

Religare AEGON has applied for SEBI approval for at least five schemes, three of which are FMP schemes, one is liquid and the other is a liquid-plus scheme.