L&T completes sale of mutual fund business to HSBC; know what happens to investors
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HSBC Mutual Fund will manage the assets of L&T Finance Holdings from November 26. As a result of the acquisition,
In a notice to investors on its website, HSBC Mutual Fund said that it has planned a scheduled maintenance of their systems.
“Therefore, youwill not be able to access the website properly or input online transactions for HSBC Mutual Fund on 25 November 2022 (Friday) from 3.01 PM IST to 28 November 2022 (Monday) 9.00 AM IST,” the fund house said.
After the specified time, L&T mutual fund schemes will either be transferred to HSBC Mutual Fund with a different name or will be consolidated with identified mutual fund schemes of HSBC.
It is to be noted that after the merger, residents of Canada and US will not be allowed to invest HSBC mutual fund schemes in India; however, existing investors will remain unaffected. Notably, after the specified time, US and Canada investors of L&T mutual fund schemes will not be allowed to make any financial transactions, other than non-financial requests or redemptions.
Dinanath Dubhashi, Managing Director & CEO, L&T Finance Holdings Limited, said “The sale of the mutual fund business provides solid impetus to our pace of retailisation, where the retail portfolio mix today stands at 58% of our total loan book. We believe, that along with retailisation, a customer-focused approach, and continuing with our chosen ‘Right to Win’ businesses, we will create value for all our stakeholders.”
L&T Finance Holdings said it received Rs 3,484 crores (equivalent of $425 million) as consideration for the sale, and also realised surplus cash balance of Rs 764 crores in L&T Investment Management Limited, the asset manager to L&T Mutual Fund (LTIML).
The proceeds from this transaction will be deployed primarily in strengthening the balance sheet which will help drive growth and innovation in the retail lending businesses, in line with the stated Lakshya 2026 goal of becoming a top-class, digitally enabled, retail finance company, said L&T Finance Holdings in a statement.
The retail businesses of the company witnessed robust disbursement momentum in Q2FY23 with the highest ever quarterly disbursements at Rs 10,238 crores in Q2FY23, up 84% YoY. The Retail Finance book grew by 27% YoY, on the back of the highest-ever quarterly disbursements, surpassing Q1FY23 levels.