Under the proposed transaction, State Street Global Advisors will invest up to Rs 580 crore in Groww AMC through a mix of secondary share purchases and primary subscription of new shares. The transaction will result in a dilution of up to 23% of the stake of Groww AMC.
State Street Global Advisors will not hold more than 4.99% of the aggregate voting power in Groww AMC after the transaction is completed. The structure has been designed to comply with regulatory norms applicable to asset management companies, while still allowing the global fund house to participate economically in the business.
As part of the deal, Groww AMC will also enter into a separate strategic relationship agreement with the investor. This agreement will come into effect on a date mutually decided by the two parties.
Following the completion of the transaction, Groww AMC will cease to be a wholly owned subsidiary and will continue to operate as a subsidiary of Groww. The company clarified that Groww AMC is currently classified as a non-material subsidiary.
The investment is expected to provide Groww AMC with additional capital to scale up its mutual fund operations, strengthen investment capabilities and build long-term products for Indian investors. The strategic relationship is also likely to open avenues for knowledge sharing, global best practices and potential product collaboration over time.
Also read: Groww Q3 Results: Cons net profit drops 28% YoY to Rs 547 crore due to one-off, but revenue up 25%Groww has been steadily expanding beyond its core broking platform into adjacent financial services, with mutual funds emerging as a key growth area. Groww AMC manages the schemes of Groww Mutual Fund, which has been gaining traction among retail investors, particularly younger, first-time participants in the markets.
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