New Delhi, Sept. 10 -- Prudent Corporate Advisory, an independent distributor of wealth and insurance products backed by Singapore's Temasek, has inked a deal to acquire Indus Capital's mutual fund distribution business.
The transaction, executed through a business transfer agreement with Indus Capital's proprietor Sanjay Sanghvi, will be conducted as a slump sale of a going concern.
According to the deal agreement, Prudent will pay Rs 123.75 crore (nearly $14 million) for the distribution business. The acquisition covers assets under management (AUM) worth Rs 2,030 crore as of August 30, and includes all customer folios, contracts, employees, and all associated rights, interests, duties, and obligations. Equity funds comprise 95% of Indus Capital's AUM.
Prudent Corporate Advisory said that the acquisition will help strengthen its mutual fund distribution vertical, expand customer base, enhance AUM, and fuel overall business growth. Singapore state investment firm Temasek owned a 6.69% stake in Prudent as of June 30.
"The acquisition will not only accelerate our retail expansion but will also be immensely cash accretive for our shareholders," Sanjay Shah, chairman and managing director of Prudent Corporate Advisory said in a presentation to investors.
Founded in 2003, Ahmedabad-based Prudent Corporate Advisory distributes mutual fund schemes and insurance policies as well as other financial products such as portfolio management services, alternative investment funds, certain fixed deposits, unlisted securities, and bonds. The company also offers stock broking services.
Prudent's consolidated net profit rose 17% year-on-year(y-o-y) to nearly Rs 52 crore in April-June, aided by robust operational growth and increased other income from treasury gains.
The revenue from operations grew 18% YoY to nearly Rs 294 crore, driven by an increase in quarterly average AUM in the mutual fund segment.
The company's assets under management rose at a CAGR of 40% in the last five years. The asset under management rose further to Rs 1.2 lakh crore as on June 30 from around Rs 1 lakh crore at the end of FY25.
Currently, mutual funds and insurance products comprise over 90% of the overall revenue.
Published by HT Digital Content Services with permission from VC Circle.