Baroda Asset Management India, a wholly-owned subsidiary of Bank of Baroda and BNP Paribas Asset Management India, a subsidiary of BNP Paribas Asset Management Asia (BNPP AM), are merging their mutual fund business.
After the transaction closes, Bank of Baroda will have a stake of 50.1% in the combined asset management company and a 50.7% stake in the combined trustee while BNP Paribas will hold the remaining.
The transaction is subject to regulatory clearances and other legal approvals.
This partnership will enable us to offer products and services to a much larger investor base in India"
State-owned Bank of Baroda, based in the state of Gujarat, is the third largest lender in India, with 9,500 branches across the country. The average assets under management (AAUM) for the Baroda AMC stood at ₹11,320 crore and BNP Paribas AMC was ₹10,073 crore, as of 31 March.
"By leveraging Bank of Baroda's large number of branches for distribution and our global experience of managing assets across more than 30 markets, this partnership will enable us to offer products and services to a much larger investor base in India," Ligia Torres, BNP Paribas Asset Management's chief executive officer for Asia Pacific, said in a statement.
State-owned Bank of Baroda's chief executive and managing director, P S Jayakumar, welcomed the partnership, praising BNP Paribas Asset Management's "robust investment and risk management processes".
"This joint venture will allow us to create a stronger, more competitive asset management company in the Indian mutual fund industry with the large distribution network of Bank of Baroda and the expertise of BNP Paribas coupled with the benefit of the firm's ability to source offshore funds," said Jayakuma.
The consolidation will lead to greater business synergies and will also help in creating a complete range of schemes as well as larger sized schemes, the bank said.
Top-up scheme for next six months