Bank of Baroda, BNP Paribas combine asset strengths to form Baroda BNP Paribas Mutual Fund; Stock gains over 1%

15 Mar 2022 , 11:06 AM

Bank of Baroda (BOB) and BNP Paribas Asset Management on Monday said they have entered into a strategic partnership by combining the strengths of their respective asset management businesses to form ‘Baroda BNP Paribas Mutual Fund’.

The merger of Baroda Asset Management India Limited (Baroda AMC) with BNP Paribas Asset Management India Private Limited (BNPP AMC), and BNP Paribas Trustee India Private Limited (BNPP TC) with Baroda Trustee India Private Limited (Baroda TC), has come into effect from March 14, 2022.

At around 11.10 am, Bank of Baroda was trading at Rs108.30 per piece up by Rs1.4 or 1.31% from its previous closing of Rs106.90 per piece on the BSE.

BOB had entered into binding transaction documents in 2019 with BNP Paribas Asset Management Asia Limited (BNPP AM) in relation to the following transactions (together the ‘Transaction’):
(i) merger of Baroda Asset Management India Limited with BNP Paribas Asset Management India Private Limited (Surviving AMC); and
(ii) merger of BNP Paribas Trustee India Private Limited with Baroda Trustee India Private Limited (Surviving TC).

“The merger has been completed and the Surviving AMC and Surviving TC have commenced operations from March 14, 2022,” company said in a filing on Monday.

AAUM for quarter ended December 31, 2021 for Baroda Asset Management India Limited was Rs12,769 crore and BNP Paribas Asset Management India Private Limited was Rs9116 crore.

“Baroda AMC was in the business of administering and managing mutual fund schemes of the Baroda Mutual Fund. Whereas, BNPP AMC is in the business of administering and managing mutual fund schemes of the BNP Paribas Mutual Fund, undertaking advisory activities and acting as a portfolio manager,” it added.

Rationale for the transaction

• Leverage on both BNP Paribas’ global asset management know-how and Bank  of Baroda’s experience in running Indian retail networks to further grow the business;
• Consolidation of operations within Baroda AMC and BNPP AMC, and that of BNPP TC and Baroda TC leading to greater business synergies;
• Consolidation of schemes of Baroda Mutual Fund and BNP Paribas Mutual Fund, creating a more complete range of schemes as well as larger sized schemes;
• Consolidation of trusteeship services in relation to the said Mutual Funds;
• Stronger balance sheet and net worth to meet capital needs for future growth and expansion;
• Distribution relationships with different types of intermediaries to widen the coverage and outreach to customers; and
• Operational efficiencies and scale to grow the business.

Bank of Baroda and BNPP AM respectively hold (a) a stake of 50.1% and 49.9% of the paid up share capital of the Surviving AMC (to be renamed as Baroda BNP Paribas Asset Management India Private Limited or any other name as may be approved by Registrar of Companies, Mumbai, Maharashtra); and (b) a stake of 50.7% and 49.3% of the paid up share capital of the Surviving TC (to be renamed as Baroda BNP Paribas Trustee India Private Limited or any other name as may be approved by Registrar of Companies, Mumbai, Maharashtra).