L&T Finance closer to acquiring Fidelity AMC

L&T Finance's proposed acquisition of Fidelity's asset management business in India moved a step ahead as the Securities and Exchange Board of India (Sebi) gave its no-objection certificate (NoC) to Fidelity for change in control of the company.

While Fidelity and L&T Finance are still awaiting the final nod from the regulator for the acquisition of Fidelity's mutual fund business by L&T, the deal has certainly moved a step ahead.

"We are pleased to announce that Sebi has confirmed that it has no objection to the change in control of the Fidelity India Asset management & Trustee Company," said the Fidelity spokesperson.

The spokesperson also said that completion of sale is dependent on receipt of approval from Sebi for their revised product line up.

Fidelity decided to sell its mutual fund business in India after its aggregated losses reached Rs 300 crore and the management was of the view that the regulatory environment was not conducive for growth of the business in a highly competitive market.

Earlier in April, L&T Finance announced the acquisition of Fidelity's asset management business in India.

Sources close to the development said that L&T Finance will pay around Rs 550 crore for the mutual fund business that had assets of Rs 8,881 crore as on December 2011.

Sources in the industry and within the company however now say that probably Fidelity management took the decision in haste and should have waited as the regulator announced a number of measures that have now made the asset management business more lucrative.

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