The board of directors of IDFC Ltd. and IDFC Financial Holding Ltd. approved to initiate steps to divest its mutual fund business.
On Sept. 17, the board gave approval to the strategy and investment committee to take necessary steps, including appointment of investment banker, IDFC said in a notification to the stock exchanges.
The decision comes days after the board and management of IDFC faced criticism from investors for delay in value unlocking.
During an investor call on Sept. 14, IDFC's shareholders sought sale of the asset management business and distribution of sale proceeds. Later, the holding company should be merged with IDFC First Bank Ltd, the shareholders said.
Vinod Rai, non-executive chairman of IDFC however noted that there would be heavy taxation for shareholders if the sale proceeds are distributed and IDFC would not be an attractive merger candidate for the bank.
At the upcoming annual general meeting on Sept. 22, the company would try to provide a roadmap on future proceedings, Rai told investors.
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