Invesco Ltd is set to buy a 49% stake in the asset management unit of India's Religare Enterprises Ltd, controlled by billionaire brothers Malvinder and Shivinder Singh, for about Rs 450 crore ($84 million), a source with direct knowledge of the deal said.
While India's crowded mutual fund industry is facing headwinds in the near term because of new regulations and rising competition, some foreign asset managers such as Japan's Nippon Life Insurance Co are betting on long-term gains in India.
A spokesman at Religare declined to confirm the stake sale in the unit Religare Mutual Fund, first reported by a leading Indian financial daily newspaper, but said Chief Executive Shachindra Nath would be making a major announcement at a media briefing at 12:15 pm.
A Hong Kong-based spokeswoman for US money manager Invesco declined to comment.
Religare Mutual Fund had assets under management of Rs 10,960 crore ($2.05 billion) for the April-June quarter, according to data from the Association of Mutual Funds in India, ranking it no 14 among the country's 44 asset managers.
India's mutual fund industry grew rapidly in the last 10 years with average assets under management increasing over six-folds to Rs 6.93 lakh crore.
T Rowe Price Group Inc paid $140 million in 2009 for a 26% stake in UTI Asset Management Co, which is controlled by four state-run financial institutions.
Earlier this year, Nippon Life bought a 26% stake in Reliance Mutual Fund for $290 million.
