Sachin Bansal in talks for Essel Mutual Fund

Mumbai/Kolkata: Sachin Bansal, the co-founder and ex-honcho of Flipkart, is said to be in advanced talks with the Goyals for buying out Essel Mutual Fund.

According to sources, the representatives of Sachin Bansal and Essel Group have held a couple of rounds of meeting in Mumbai. Essel MF was earlier in formal talks with Srei Group but the talks did not fructify, apparently over valuation issues.

Sources said Sachin Bansal and former Bank of America director and investment banker Ankit Agarwal are in joint talks for acquiring Essel MF. Bansal aims to transform Essel MF into a technology-backed asset management platform.

After Flipkart exit, Sachin Bansal has been eyeing the banking, financial services and insurance (BFSI) space and has floated an investment vehicle, BAC Acquisitions, last year to invest in diverse verticals. He has invested $100 million in Ola parent company ANI Technologies in February this year, followed by investments of Rs 250-crore each in two non-banking finance companies (NBFCs), Altico Capital India Ltd and IndoStar Capital Finance Ltd. Among others, he has also invested about Rs 200 crore in the debt papers of Piramal Enterprises, a company that has interests in financial services.

Sources said talks for the Essel AMC are in the final stages and the acquisition may be announced in the next few days.

According to sources, Agarwal, who is an angel investor working with Bansal, has been meeting with the management of Essel Group.

As of June-end, the average assets under management (AUM) of Essel Mutual Fund stood at Rs 1,040 crore.

Srei Infrastructure Finance Ltd, which was in talks to acquire Essel AMC, however, refused comment on the issue. It said “No comments” to queries on Thursday.

However, Srei Infra had earlier said that its subsidiary Srei Mutual Fund Asset Management (AMC) had been exploring opportunities for acquisition of mutual fund and consequently on March 22, 2019 it had entered into a preliminary non-binding term sheet for acquisition of Essel Mutual Fund, subject to all applicable regulatory and government approval.

The term sheet was subject to execution of definite agreements and other ancillary documents as might be required depending upon the outcome of the due diligence being carried on by the AMC. Srei had made an offer also, which Essel neither accepted nor rejected. Interestingly there was an exclusivity period within which Essel Group was supposed to either accept or reject without negotiating with anyone else.

Essel Group, led by Subhash Chandra, is planning to monetise its non-media businesses amid concerns over debt repayment to its lenders.

In the next six months, the company plans to raise about Rs 20,000 crore assets by monetising its infrastructure assets. At the group level, Essel has a total debt of Rs 17,174 crore, of which Rs 11,466 crore is infrastrcuture-related.