SUMMARY
The investment marks Kotak Mahindra Bank’s foray into the rapidly growing financial solutions market
KFin, which was earlier known as Karvy Fintech, serves 25 out of the 44 Indian mutual fund AMCs, and also serves 23 mutual funds and pension managers in other Asian countries
Hyderabad-headquartered KFin recently acquired a 17% stake for an undisclosed amount in insurance tech startup Artivatic.ai
Kotak Mahindra Bank will invest INR 310 cr in Hyderabad-based registrar and transfer agency KFin Technologies to pick up a 9.9 per cent stake in the company. It announced that it has agreed to make an equity investment into the investor and issuer servicing agency. The acquisition is subject to necessary approvals.
Post the investment, Kotak Mahindra Bank will hold 1,67,25,100 equity shares in KFin translating into 9.98% equity shareholding in KFin.
KFin, which was earlier known as Karvy Fintech, provides financial technology solutions across asset classes spanning mutual funds, alternatives, insurance, and pension. As per the company, it serves 25 out of the 44 Indian mutual fund AMCs. It has also been chosen as the partner for four of the last five AMCs licensed by the Securities and Exchange Board of India (SEBI).
In May this year, KFin Technologies acquired a 17% stake for an undisclosed amount in insurance tech startup Artivatic.ai. With the acquisition, General Atlantic-owned KFintech diversified into the insurtech space.
In other Asian countries, KFin serves 23 mutual funds and pension managers including Malaysia, Philippines, Singapore and Hong Kong. Along with being a leading player in the alternatives and private wealth management space, serving over 300 AIF schemes launched by more than 100 fund managers, the startup also serves more than 550 listed and over 3,700 unlisted corporates with over 8 cr folios in India as a leading corporate registrar.
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. At Kotak Mahindra Bank, this investment is in line with our stated strategy of making minority investments in businesses which are professionally managed and have deep client entrenchment.”
M.V. Nair, Chairman, KFin Technologies was of the view that 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. The transaction is likely to be completed by the end of October 2021.
Kotak Mahindra Bank’s interest in the investor and issuer servicing startup comes at a time when retail interest and investment into several asset classes in the country is growing including mutual funds. As per data from the Association of Mutual Funds in India (AMFI) the assets under management (AUM) from SIPs in August rose to an all-time high of Rs 5.26 lakh crore, from 5.03 lakh crore in July.
KFin also has subsidiaries incorporated in Malaysia and Bahrain. Its turnover in the financial year 20221 was INR 481 cr.
