Kotak Mahindra Bank Limited has agreed to acquire 9.9% stake in KFin Technologies, a leading investor and issuer servicing platform, at an investment of ₹310 crore, the leading private bank said on Monday. The deal is subject to necessary approvals.
KFin provides financial technology solutions across a broad spectrum of asset classes spanning mutual funds, alternatives, insurance, and pension. It serves 25 out of the 44 Indian mutual fund AMCs, which have over $148 billion in AUM and 35% market share in equity AUM (up from 27% in March 2019).
This investment, Kotak Bank said, is in line with the lender’s strategy of making minority investments in businesses that are professionally managed and have deep client entrenchment.
Dipak Gupta, joint managing director, Kotak Mahindra Bank said, “As a platform of choice for asset managers, investors and corporates, we believe KFin is well-positioned to continue growing its market position…We are excited about the future growth prospects of the business and believe that an investment in KFin, with its significant franchise, will create long-term value for our stakeholders.”
KFin has been chosen as the partner for four of the last five AMCs licensed by the Securities and Exchange Board of India. KFin serves 23 mutual funds and pension managers across Asia (ex-India) including Malaysia, the Philippines, Singapore and Hong Kong. It is also a leading player in the alternatives and private wealth management space, serving over 300 AIF schemes launched by over 100 fund managers.
The company also serves over 550 listed and over 3,700 unlisted corporates with over eight crore folios in India as a leading corporate registrar. KFin is also one of the two players providing central recordkeeping services to the National Pension System in India and is expanding in insurance transaction processing and fund administration.
M.V. Nair, chairman, KFin Technologies said, “KFin is uniquely positioned to leverage its decades of deep capital markets expertise to deliver a differentiated value proposition to the financial markets in India and abroad. Kotak Mahindra Bank’s investment is testimony to the same. With Kotak Mahindra Bank’s support, along with the continued support of General Atlantic, an existing shareholder of KFin, we shall be able to achieve greater heights in our technology, business processes, leadership depth and governance.”
KFin’s proprietary applications, big data technologies and hybrid cloud environment enable servicing of over 13 crore folios and processing of over 10 lakh transactions on a daily basis.
Sreekanth Nadella, CEO, KFin Technologies said, Kotak Mahindra Bank’s shared vision to deliver outstanding value in a simple and straightforward manner, strongly complements KFin’s commitment to provide unparalleled client outcomes on demand. “We believe this investment shall serve as a strong foundation for KFin to build next generation techfin solutions for financial infrastructure institutions. We are extremely proud to have been chosen by Kotak Mahindra Bank in the rapidly expanding financial infrastructure solutions market in India and abroad.”
