DHFL to Exit Its Mutual Fund Business
Moneylife Digital Team 18 December 2018
DHFL today announced that it will completely exit its mutual fund business, DHFL Pramerica Asset Managers Pvt. Ltd (DPAM). DPAM is a joint venture between DHFL and Pramerica Financial (brand name used by Prudential Financial Inc. USA). 
 
Pramerica and DHFL formed the joint venture in 2014 and immediately expanded its business through the acquisition of Deutsche Asset Management (India) Pvt. Ltd. The transaction will not change DPAM’s scope of business, said Pramerica. 
 
DHFL holds a 50% stake in DPAM; 17.12% directly and 32.88% through its 100% subsidiary DHFL Advisory and Investments. DHFL Advisory and Investment’s main asset was the stake in this joint venture. The remaining part of DHFL Advisory and Investment consists of Rs225 crore OCDs (optionally convertible debentures) which it issued to Wadhawan Global Capital (see: https://bit.ly/2CjLP3b).
 
The transaction will make DPAM a wholly owned business of Pramerica. While Kapil Wadhawan, chairman and managing director of DHFL commented that, “This is a strategic call by DHFL to focus more on our core business”, DHFL is know to be strapped for liquidity. 
 
DHFL Asset Managers reported a revenue of Rs129.74 crore in financial year 2017-18, as against revenue of Rs109.67 crore in the previous year. It reported a profit of Rs7.76 crore in 2017-18, compared to a profit of Rs7.64 crore a year ago. DHFL’s stock ended lower by 1.83%; to close at Rs214.
 
Comments
Harish
3 years ago
Good for shareholders of DHFL
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