India

IIFL reveals intent to purchase L&T's Wealth division

In a purchase that will cost IIFL up to Rs 300 crore (USD 42.2 million), IIFL is said to be lined up to purchase the wealth management unit of L&T Finance.

The acquisition is said to be motivated by the firm’s desire to encroach on Kotak Mahindra Private Wealth management’s position as the industry leader in the wealth management sector in India, according to a report by Financial Express.

This strategy of inorganic growth by IIFL was previously showcased in the wealth division’s acquisition of Wealth Advisors India in 2018 for Rs 235 crore (USD 33 million), and the purchase of Ashburton India Equity Opportunities in 2017.

The purchase by IIFL would mean that L&T Finance can continue to shift their focus to the core areas of their business, namely infrastructure finance, housing finance, rural lending, and consumer loans.

IIFL is currently the third largest wealth management provider in India, with USD 21.4 million AUM, according to a 2018 Asian Private Banker report. ICICI is the second largest with an AUM of USD 25.6 million, and Kotak leads the industry with a USD 33.6 billion AUM.