L&T Finance in race for Cholomandalam DBS: reports

L&T Finance, a wholly-owned unit of Larsen & Toubro Ltd, is in talks to buy the domestic mutual funds operations of Cholamandalam DBS Finance, according to media reports, which however were not confirmed by either company.

Reuters quoted two unnamed sources as saying L&T Finance was keen on the deal. "We are working on their behalf," one of them said. "We can't share details at the moment. Let's wait for the transaction."

Cholamandalam DBS is a joint venture between India's Murugappa Group and Singapore's DBS Bank that runs DBS Cholamandalam Asset Management. Business Standard said L&T Finance is among several suitors for the company.

Edelweiss Capital had been appointed the advisor for Cholomandalam, according to both reports. DBS Cholamandalam had assets of about $615 million at the end of August, the company's website showed.

A source in Singapore familiar with DBS told Reuters the lender has had a rethink about the India joint venture for some time. The venture cut staff size and the number of branches last year.

DBS Cholamandalam AMC had reported a loss of Rs38 crore for the year ended March 2009. The AMC, formed in 1996, has been managing assets worth Rs3,000 crore with over 200,000 customer accounts at the end of August 2009. The company is present at over 20 locations in the country and also has a strong distribution network.