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IDFC (IDFC IN, Buy, Rs174.85) and Natixis Global Asset Management (NGAM)
announce strategic partnership for asset management business
Event
IDFC and NGAM have entered into a strategic partnership for the public markets asset
management business. According to IDFC management, this gives IDFC the opportunity to
significantly enhance its international distribution, gain access to global investors and allow
domestic investors access to international investment opportunities through NGAM-managed
products.
As part of the deal, IDFC has agreed to sell a 25% equity stake in the IDFC AMC business to
NGAM, subject to applicable regulatory approvals.
Impact analysis
According to media reports, the deal for the 25% stake was struck at about Rs2.75bn.
Accordingly, IDFC’s FY12F book value will increase by about Rs2 per share to Rs73.3. Note,
currently our reported FY12 book value is after deducting the entire goodwill amount on IDFC’s
balance sheet (Rs11.6bn as of September 2010).
At the current price, IDFC trades at 2.4x FY12F earnings
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