Mumbai: The financial services unit of India’s Larsen & Toubro Ltd is in talks to buy Cholamandalam DBS Finance’s domestic mutual fund operation, two sources familiar with the matter said.
“We are working on their behalf,” one source said, referring to L&T Finance, a wholly owned unit of L&T. “We can’t share details at the moment. Let’s wait for the transaction.”
Officials at Cholamandalam DBS, a joint venture between India’s Murugappa Group and Singapore’s DBS Bank that run DBS Cholamandalam Asset Management with assets of about $615 million, could not be immediately reached for comment.
Another source said Edelweiss Capital was the advisor for the asset manager.
A source in Singapore familiar with DBS said the lender has had a rethink about the India joint venture for some time.
“It’s about high time we do so,” he said when asked if DBS was planning to divest its stake in DBS Cholamandalam.
Cholamandalam DBS shares rose by the maximum daily limit of 10% on Monday to Rs63.35.
Senior officials at Larsen & Toubro, India’s largest engineering and construction firm, had said last month the diversified company was interested in expanding its presence to asset management and insurance businesses.
Earlier this month, L&T Finance successfully raised about $200 million via a retail bond sale.