Sundaram Asset Management gets SEBI nod to buy Principal AMC India

Sundaram AMC, a wholly owned subsidiary of Sundaram Finance Limited, will acquire the schemes managed by Principal India and acquire 100% of the share capital of Principal Asset Management Pvt Ltd. Ltd., Principal Trustee Company Pvt. Ltd., and Principal Retirement Advisors Pvt. Ltd.

the deal was originally declared on 28 January.

After the closure of the deal, the schemes currently managed by Principal India and Sundaram AMC will either be merged or renamed as Sundaram AMC Schemes in their respective categories. All investors and distributors of Principal India Schemes will become investors/distributors of Sundaram Mutual Fund.

According to Sundaram AMC, a wide range of equity schemes will be available for a combined investor base of over two million and a strong distribution franchise across a countrywide network of 88 branches.

Commenting on the acquisition, Sunil Subramaniam, Managing Director, Sundaram AMC said, “We look forward to complementing our existing equity fund management talent by inducting the team at Principal India. We endeavor to retain and absorb the Distribution Franchisee of Principal India with minimum disruption in their business terms. The existence of a single Back Office Service Provider (RTA) is expected to ease the transition for existing customers and distributors.”

The transaction is subject to compliance with the procedures laid down by SEBI and fulfillment of mutually agreed conditions for closure of the transaction. As per regulatory requirements, there will be an ‘Exit Load Free Window’ for investors to redeem their investments where such exit load is applicable.

Along with its subsidiaries, Sundaram AMC had assets under management (AUM) of approx. 45,036 crore as on 31 October, of which more than 80% was in equities. On the other hand, the AUM of Principal India was 9,558 crore with around 95% in equity.

Harsha Viji, Executive Vice President, Sundaram Finance, said, “This acquisition is a natural step in our aspiration to become a major player in the asset management industry. Joint business of both the entities will achieve an aspirational milestone 50,000 crore we will be able to leverage the combined platform to achieve significant synergies. Our focus will be on providing a superior experience to our investors and distribution partners.”