Dhanalakshmi Bank intends to enter the asset management business by investing US$3.085 million to US$4.1 million in an existing fund. The move could make Dhanalakshmi the first old private sector bank to hold stake in an AMC.
"We have three options to enter the asset management company - either start our own fund, buyout an existing fund or join an existing fund by picking up stake. We are in talks with two to three AMCs currently," said Amitabh Chaturvedi, Dhanalakshmi Bank MD & CEO.
"This will be just a small investment. Some of them have even told us to partner with them without putting any money too," he added.
The bank recently raised US$35.99 million by placing tier-II bonds with non-resident Indians.
"In all likelihood, we would be looking at a joint venture. To start with, we would buy a small stake in an existing fund, with a right of controlling stake at a pre-arranged price formula," Chaturverdi said.
The move to enter the AMC space comes at a time when the industry is grappling with profitability issues.
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