SEBI May Delay Hinduja Group’s Invesco AMC Acquisition

According to a Moneycontrol news report, The Hinduja Group’s planned acquisition of a 60% stake in Invesco Asset Management (India) Pvt Ltd through IndusInd International Holdings Ltd (IIHL) may be delayed, as SEBI raises questions amid ongoing investigations related to IndusInd Bank.

As of 1:49 PM on May 20, IndusInd Bank Ltd share price was at ₹785.50, a 0.18% increase, but down 19.97% over the past 6 months and 44.15% over the past year.

Sponsor Approval Still Pending

While the Competition Commission of India cleared the transaction on August 20, 2024, and SEBI granted in-principle approval on August 30, 2024, final sponsor approval remains pending. IIHL, as the proposed sponsor of the mutual fund, is required to comply with SEBI regulations, including establishing the mutual fund trust and the asset management company.

Concerns Over Funding Structure

SEBI has asked IIHL to clarify how it intends to fund the acquisition, whether it will deploy internal equity or rely on borrowings. The regulator has also asked if any of Invesco’s shares are proposed to be pledged as part of the funding arrangement. This follows SEBI’s efforts to ensure transparency in ownership and financing structures, especially in deals involving financial sector entities.

Link to IndusInd Bank Investigations

IIHL is the majority promoter of IndusInd Bank, holding a 12.06% stake as of March 2025. According to filings, 35.5% of this holding has been pledged. Investigations into the bank’s financial reporting are ongoing. A forensic audit conducted by Grant Thornton found evidence of insider trading and accounting irregularities.

Reported Financial Discrepancies

The audit reports highlighted discrepancies worth over ₹1,960 crore. These include ₹674 crore in overstated microfinance interest income, ₹595 crore in "other assets," and errors in accounting for derivatives. These findings have resulted in senior management exits and stock downgrades by brokerages.

Read more: IndusInd Bank to Realign Senior Management Roles After Accounting Review

Conclusion 

The Hinduja Group's efforts to expand its footprint in India's asset management industry through the strategic acquisition of Invesco could face a significant obstacle if SEBI's sponsor approval is delayed.

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