Japanese financial services firm Nomura will pick up 35% stake in LIC Mutual Fund (LICMF). Housing subsidiaries of state-owned insurers will sell their stakes in LICMF for Rs 227 crore. The deal values the fund at $149.3 million, or about 2.5% of its May average assets of Rs 28,600 crore.
Nomura will gather the 35% stake from different institutions like LIC Housing Finance and GIC Housing Finance and Life Insurnace Corporation.
LIC Housing Finance is all set to sell a 18.3% stake to Nomura for about Rs 138 crore. "As per the agreement between LIC and Nomura, we are selling 18.3% of the total stake of 38.3% in LIC Mutual Fund to Nomura. The rest, 20%, will be retained by LIC Housing Finance," LIC Housing Finance MD and chief executive RR Nair said.
"It is a group decision to have partnership with an international company and details would be discussed during the annual general meeting of the company to be held on July 21,'' said Nair.
Similarily, GIC Housing Finance is likely to make a strategic sale of its entire holding of 11.2% in LICMF Asset Management Company (the investment manager of LICMF) and also its entire holding of 3% in LICMF Trustee Company for a consideration of Rs 89 crore.
The remaining stakes will be picked up by Nomura from LIC itself. However, how much the LIC is likely to get after the strategic sell, is not clear as yet.
Nair said a Nomura nominee is likely to join the board of LICMF AMC after the transaction is completed. The idea to get a foreign partner is to have an international exposure and the international expertise, said Nair.
Nomura, of late, has expanded its various businesses in the country. Recently it bought out the Indian operations of failed Lehman Brothers' investment banking business.