Enough has been said and talked about the global economy crisis and bankrupties all around the globe.There are no positive cues what so ever in the air to give even a whiff of things changing for the better.Even the dire steps taken by the governments have not generated any interest et all.
The big 700 billion $ bailout fell on deaf ears from the very beginning and even after the approval,has not been able to arise any hope for the people.
Then,being the reactive kinds that they are,FED’s adopt dropping the interest rates to get the liquidity flowing to the banks.And we Indians-The third world touted as the hunting ground for the most talented brains in the world,do nothin more than aping the FED’s.The people at the helm of the affairs have gone bonkers with their “If FED is doing it,we might do the same and help the ailing economy” Ideology.Now,someone tell me if FED was that damn good,the world will actually not be as gloomy as it is now.But,then some wise sage did say,
“In every tragedy,lies an oppurtunity”
And this is completely evident in the current scenario.The valuations of the companies are at rock bottom with some players even finding it difficult to hold their own.We had Merryl Lynch going down to a bigger shark and the same goes for a lot of other so called biggies in the Finance World.
But,a recent news piece concerning the Indian Mergers&Acquistions,which Manrag bought to my notice,got me writing this post.
“Religare Enterprises to buy out 100% in Lotus MF”
Now,this sure is no normal news when you consider that Lotus MF was managing a healthy portfolio and had more than half a dozen Mutual Funds in the market.But,then true test of character shows when the times are tough.
India has witnessed the mushrooming of AMC’s(Asset Management Companies) in the past 5-6 years or so,and with India and the global markets riding the bull wave they were for the period,most of the fund management houses were churning out enough juices to get their investors happy.
But,as they say “Good times never last for eternity”,the amc’s have felt the maximum heat in these testing times.The bleeding markets have even got some fund houses struggling to meet their minimum liquidity criteria ,leave aside delivering profits.
As,Lotus MF gets sold out to Religare,it sure gives positive signs that atleast this will lead to consolidation in the Indian AMC space.With small fund houses either selling out to bigger ones or shutting down their doors,we sure could expect better quality in terms of Return On Investments.
With lesser number of Fund Houses managing much larger portfolio’s,the onus will be on the AMC’s to deliver the best returns to the Investors and the Investors will also be able to track their investments better.
This buy-out by Religare will definetly boost their already 50 billion$ enterprise and they will certainly enjoy the fruits of their acquisiton,which i am sure was done at a dirt cheap price.
Let’s hope,it all points to a better economy and financial consolidation now.
For now,It’s sure raining discounts in the M&A space,so watch out for more buyouts like this.
Till then,Happy Investing;-)
hello ankit good one..yaar…but in the end u know that aprt from these deals idia accounts for only 1% of global M&A….actually it is just .8% to be precise……till september M&A value was around 3 Trillioj USD..out of ewhich india accounted for a meagre 26 billion USD…
and one more thing macha..in the end somewhere u have mentioned theR RELIGARE ENTERPRISE value at around 50 BILLION USD….u sure??
Lotus AMC was formed by Rana Talwar of SABRE Capital and Fullerton Fund of Singapore…..Ajay Bagga was its CEO…….
Thefund had suffered 1/3 depreciation in its assets in past 2 months asnd was severly facing Reedemption pressures…….Ajay Bagga was having back against wall..experts have been sayig this….
Excellent blog ..
keep up the good work..
–Prasanna