Temasek to foray Indian MF mkt; eyes big buyout

Singapore-based Temasek Holdings is in talks with an MNC fund house in India for a complete buyout to foray into lucrative mutual funds market here.

The company is said to be in the final stages of negotiations with the fund house which manages over Rs 9,000 crore of assets, investment banking sources said here.

Temasek, with a strong global presence worth Singapore $ 103 billion, has already applied to market regulator Securities and Exchange Board of India (Sebi) for a license to enter the Indian mutual fund industry.

"Temasek is negotiating terms with a foreign fund house which has got no presence in the AUM business internationally and hence, as a policy decision, it wants to exit this market in India as well," highly placed sources said.

Earlier, Temasek had hired former Kotak Mahindra Financial CEO Ajay Bagga as fund manager for the mutual fund.

Since this mutual fund has got a good base, they expect a higher valuation in the given market conditions in India, sources said.

Temasek spokespersons were not available for comment. This inorganic growth should help Temasek to enter the market in a big way with an Asset Under Management (AUM) of around Rs 10,000 crore, thus giving them the advantage in the highly competitive market.

Industry sources said along with Temasek, three more global players including JP Morgan, AIG, and Aegon have applied for license to enter the Mutual fund industry and are in the process of getting necessary regulatory approvals.

As per the data released by the Association of Mutual Funds in India (AMFI), the AUM of the Indian mutual fund industry stood at Rs 2.655 trillion in June.