Indian nonbanking financial firm L&T Finance has concluded the divestment of its mutual fund business to HSBC Asset Management India (HSBC AMC) for around $425m.

As part of the deal, L&T Finance also realised extra cash balance of approximately INR7.64bn in L&T Investment Management (L&T AMC), which is the asset manager to L&T Mutual Fund (LTIML).

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The deal enables HSBC to enhance its wealth and asset management business in Asia.

It comes shortly after HSBC AMC received clearance from the Competition Commission of India (CCI) for the deal.

With the closing of the deal, which was first revealed in December 2021, HSBC AMC now owns 100% share capital of L&T AMC.

A wholly owned subsidiary of L&T Finance, L&T AMC currently has presence across 65 locations across India. The firm also handles digital platforms.

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L&T Finance plans to use the proceeds from the deal to bolster expansion of its retail lending businesses under its Lakshya 2026 goal of becoming a digitally-driven, retail finance company.

L&T Finance managing director and CEO Dinanath Dubhashi said: “The sale of the mutual fund business provides solid impetus to our pace of retailisation, where the retail portfolio mix today stands at 58% of our total loan book.

“We believe, that along with retailisation, a customer-focused approach, and continuing with our chosen ‘Right to Win’ businesses, we will create value for all our stakeholders.”