IDBI Mutual Fund signs agreement to transfer schemes to LIC MF

Merger likely to make LIC MF the 22nd largest fund house by AUM

IDBI Mutual Fund has signed an agreement with LIC Mutual Fund to transfer its schemes to the latter, IDBI Bank informed exchanges on Friday.

"A Scheme Transfer Agreement has been signed between IDBI MF and LIC MF for transfer of Schemes of IDBI MF to LIC MF to comply with Regulation 7B of SEBI Mutual Fund Regulations," IDBI Bank said.

Mutual fund rules prohibit a single promoter from owning more than 10 per cent stake in multiple asset management companies. Since LIC took over IDBI Bank in 2019, the insurance major ended up holding a majority stake in both LIC MF and IDFC MF. Hence, the life insurer had only two options — either to sell one of the mutual funds or merge the two.

In the September quarter, LIC MF had average assets under management (AUM) of Rs 17,879 crore and IDBI MF had Rs 3,761 crore. Going by the September quarter AUM, the merger will take LIC MF to the 22nd position in AUM rankings, up one spot from the present position.