Light at end of the Tunnel for IDFC shareholders as board approves divestment of MF business

It all started at the Pre-AGM (Annual General Meeting) Conference Call conducted on September 14, 2021, wherein one of the ace investors of the Indian equity market shared his pain about the performance of the stock. He stated that the stock has delivered negative returns in the last five-year period as compared to more than two-fold gains delivered by the Bank Nifty during the same period and at the same time. He requested the board and management to give a timeline to shareholders for the sale of its asset management company (AMC) business.

And interestingly, on September 17, 2021, the Board of Directors of IDFC Limited and IDFC Financial Holding Company Limited (IDFC FHCL) have considered and approved to initiate steps to divest its mutual fund business subject to requisite regulatory approvals, as applicable. The Boards have authorized respective Strategy & Investment Committees to take necessary steps, including the appointment of Investment Banker, for the same.

IDFC AMC is a direct subsidiary of IDFC FHCL and an indirect subsidiary of IDFC.  

IDFC AMC’s quarterly average assets under management (QAAUM) for the June quarter was at Rs 1,26,049.04 crore. The stock ended lower by 2.3 per cent on Friday, however, on weekly basis, it has gained nearly 3.11 per cent.