SUMMARY
The Flipkart cofounder is reportedly in talks to acquire Essel Mutual Fund
He was earlier reported to be in talks to launch a new fintech venture
Digital investing in India is expected to grow at more than double the rate of overall mutual funds investment
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Flipkart cofounder Sachin Bansal is reportedly foraying into the mutual fund space with plans of acquiring Essel Mutual Fund.
According to a media report, multiple meetings have already taken place between both the parties in Mumbai. With this deal, Sachin Bansal is said to planning a digital asset management platform.
In February, Sachin Bansal was reported to be in talks with financial experts on the potential to launch a new venture in the fintech sector. He had also reportedly met Reserve Bank of India executives to figure out the eligibility requirements for starting a bank.
Earlier this year, a Deloitte India report has estimated digital-invested assets under management (AUM) to grow by around 80% from approx INR 250 Bn in 2018 to INR 450 Bn in 2019. While, digital investing is expected to grow at more than double the rate of overall investment in mutual funds.
Different digital channels for investing in mutual fund accounted for around INR 250 Bn in AUM in FY18; this is still a meagre 2.3% share of the overall AUM of individual investments in mutual funds. Deloitte predicted that such digital channels will see a 75% increase in AUM and account for around INR 450 Bn of AUM by FY19.
Other players in the Indian personal wealth management space include JioGenNext-incubated Sqrrl, Times Internet’s ETMONEY, and Sequoia-backed venture Groww, among others. The Indian fintech software market is estimated to reach $2.4 Bn by 2020.
Sachin Bansal Investments
Sachin Bansal had marked a huge exit from Flipkart, when the company was acquired by US retail giant Walmart in 2018. He raked up millions and will keep receiving till 2020. The earnings coupled with years of connections in the Indian startup ecosystem, Bansal has been proving beneficial to the Indian entrepreneurs with his investments and mentorship.
In December 2018, Bansal along with his friend Ankit Agarwal registered BAC Acquisitions Pvt Ltd in Bengaluru with the vision of developing platforms which can optimise business automation and enable digitisation of processes across sectors.
The company had increased its authorised share capital to INR 7,500 Cr ($1.05 Bn) in January, soon after which Bansal had invested $7 Mn (INR 50 Cr) in the company.
Just this week, electronics maker, boAt has received a commitment of INR 20 Cr (about $2.9 Mn) in venture debt from BAC Acquisitions. Prior to this, Sachin Bansal had also infused INR 200 Cr (around $29 Mn) into Ajay Piramal owned Piramal Enterprises, which is expected to use this funding for its financial services business.
Further, the first two investments of BAC acquisitions were also made in finance space, including two Non-Banking Financial Companies (NBFCs) — Altico Capital India and IndoStar Capital Finance via debt of $35.16 Mn (INR 250 Cr) each.
Earlier in April, Sachin Bansal was also reported to be in acquisition talks with as much as 75% stake in Bengaluru-based Chaitanya Rural Intermediation Development Services which runs a microfinance institution, Chaitanya India Fin Credit (CIFCPL) in a deal worth INR 200 Cr.
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