Jointly by M/s LIC Mutual Fund Asset Management Limited; M/s LIC Mutual Fund Trustee Private Limited and M/s IDBI Asset Management Limited — Combination C-2023/02/1001

Notice under Section 6(2) of the Competition Act, 2002 jointly filed by LIC Mutual Fund Asset Management Limited, LIC Mutual Fund Trustee Private Limited and IDBI Asset Management Limited

CORAM: Ms. Sangeeta Verma Acting Chairperson

Mr. Bhagwant Singh Bishnoi Member

Order under Section 31(1) of the Competition Act, 2002

1. On 07.02.2023, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act) jointly filed by LIC Mutual Fund Asset Management Limited (LIC AMC), LIC Mutual Fund Trustee Private Limited (LIC TC) and IDBI Asset Management Limited (IDBI AMC).

2. The proposed combination entails the following: (i) LIC AMC‟s acquisition of the rights to manage and administer the schemes of IDBI Mutual Fund (IDBI MF) from IDBI AMC (LIC AMC Transaction); (ii) LIC TC‟s acquisition of the rights of trusteeship of the schemes of IDBI MF from IDBI MF Trustee Company Limited (IDBI TC) (LIC TC Transaction); (iii) consequently, the schemes of IDBI MF will form part of LIC Mutual Fund (LIC MF) with LIC AMC acting as the asset management company for the schemes of IDBI MF and LIC TC acting as the trustee company of the schemes of IDBI MF; (iv) as part of consideration for the steps set out in paragraph 2 (i) – (iii) above, apart from lump sum consideration, IDBI AMC will also acquire certain non-controlling shareholding in LIC AMC.

The transactions set out in 2(i)-(iv) above are collectively referred to as the “Proposed Combination”.

Combination Registration No. C-2023/02/1001 (Hereinafter, LIC AMC and LIC TC are collectively referred to as the „Acquirers‟; The schemes of IDBI MF are referred to as the „Target’; IDBI AMC and IDBI TC are collectively referred to as the “Sellers”; and the Acquirers and Target are collectively referred to as the „Parties‟)

3. The notice has been filed, inter alia, pursuant to a Scheme Transfer Agreement amongst IDBI AMC, IDBI TC, LIC AMC, and LIC TC, dated 29 December 2022 (Scheme Transfer Agreement).

4. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to transaction of business relating to combinations) Regulations, 2011 (Combination Regulations), the Parties were required to provide certain information(s)/clarification(s) relating to the Proposed Combination vide the Commission‟s letter (RFI) dated 23.02.2023; response to the RFI was received on 28.02.2023. Further, the response to certain clarification(s) in relation to the Proposed Combination were received on 20.03.2023.

Parties to the Combination Acquirers (LIC MF and LIC TC) 5. Life Insurance Corporation of India (LIC) is the sponsor of LIC MF. LIC directly holds 45% shareholding in LIC AMC and 49% shareholding in LIC TC. The remaining shareholding in the Acquirers is also indirectly held by LIC. As such, LIC is the ultimate parent company of the Acquirers, and the Acquirers belong to the “LIC Group”.

6. LIC AMC is a company incorporated in India and acts as an investment management advisor to LIC MF. It manages the investment portfolio and provides various administrative services to LIC MF. LIC AMC also provides portfolio management services to clients under Securities and Exchange Board of India (portfolio managers) Regulations, 1993. LIC TC is a company incorporated in India and acts as the trustee company of LIC Mutual Fund. It is also stated in the notice that the Acquirers are engaged in the business of offering equity-oriented, debt-oriented, hybrid (balanced), solutions-oriented, and other mutual fund schemes. Target (Schemes of IDBI Mutual Fund)

Combination Registration No. C-2023/02/1001

7. The Target is the schemes of mutual funds business of IDBI MF in India. The Target has equity-oriented, debt-oriented, hybrid (balanced), and other mutual fund schemes. IDBI Bank (which is ultimately owned and controlled by LIC and Government of India with shareholding of 49.24% and 45.48% respectively) is the sponsor of IDBI MF. IDBI Bank holds 100% shareholding in IDBI TC and 66.67% shareholding in IDBI AMC (remaining 33.33% shareholding in IDBI AMC is held by IDBI Capital Market Services Ltd.). IDBI AMC‟s principal activity is to act as asset management company to the IDBI MF, while IDBI TC acts as the trustee company of IDBI MF in India.

Identification of Overlaps Horizontal Overlaps 8. It is submitted in the notice that the Acquirer is engaged in the provision of equity, debt, hybrid, solutions, and other mutual funds in India. The Target however only has schemes of equity, debt, hybrid, and other mutual funds in India. Accordingly, the overlaps between the Acquirers/ IDBI MF, may be delineated at broad level as the market for the provision of mutual funds and at narrower level as: (i) the market for the provision of equity mutual funds; (ii) the market for the provision of debt mutual funds; (iii) the market for the provision of hybrid mutual funds; and (iv) the market for the provision of other mutual funds.

9. It is also stated that the Acquirers are also engaged in the narrow market of provision of solutions-oriented mutual funds in India. However, the Target does not have solutions-oriented mutual funds in India. Accordingly, there is no horizontal overlap between the Acquirers and the Target in the narrow market for provision of solutions-oriented mutual funds in India.

Vertical Relationship

10. It is submitted in the notice that the Target and Acquirers are active in the upstream market of provision of mutual funds in India. Further, LIC Group (including other portfolio companies of LIC (such as Axis Bank Ltd., Bank of Maharashtra, Central Bank of India, Indian Overseas Bank, Punjab & Sind Bank, Mahindra & Mahindra Ltd. (through Mahindra & Mahindra Financial Services Limited), Stock Holding Corporation of India (through SHCIL Services

Combination Registration No. C-2023/02/1001

Limited), IFCI Ltd. (through IFCI Financial Services Ltd.), State Bank of India, and UCO Bank) are present in the downstream market of distribution of mutual funds in India.

Relevant Markets

11. It is submitted in the notice that the relevant markets for horizontal overlaps may be considered at broad level as market for the provision of mutual funds in India (Broad Relevant Market); and at narrower level as: (i) the market for the provision of equity mutual funds in India; (ii) the market for the provision of debt mutual funds in India; (iii) the market for the provision of hybrid mutual funds in India; and (iv) the market for the provision of other mutual funds in India. (Relevant markets at the narrower level collectively referred to as “Narrow Relevant Markets”).

12. With regard to vertical relationship, it is submitted that the relevant market may be considered at upstream level as (i) the market for the provision of mutual funds in India along with its narrower segments (Upstream Market); and at downstream level as (ii) the market for distribution of mutual funds in India (Downstream Market).

13. The Commission decided to leave the exact delineation of the relevant markets open as it was observed that the Proposed Combination, is not likely to cause an appreciable adverse effect on competition in any of the plausible alternative relevant markets that could be delineated due to the reasons mentioned in the subsequent paras of this order.

Competition Assessment 14. Based on the submissions of the Parties, it is noted that the combined market share of the Parties is insignificant in Broad Relevant Market as well as in the Narrow Relevant Markets. Further, there are other players present in these markets such as SBI Mutual Fund, ICICI Prudential Mutual Fund, Aditya Birla Sun Life Mutual Fund, Kotak Mahindra Mutual Fund, TATA Mutual Fund which will continue to pose competitive restraints on the Parties post the Proposed Combination.

15. With regard to the vertical relationship, it is submitted in the notice that, in the Upstream Market, the combined market share of the Acquirers/ IDBI AMC, post the Proposed

Combination Registration No. C-2023/02/1001

Combination would be insignificant and there are other players present such as SBI Mutual Fund, HDFC Mutual Fund and ICICI Mutual Fund. Further, in the Downstream Market, the combined market share of LIC Group (including LIC‟s portfolio companies) would be in the range of [10-15] % and there are various entities engaged in distribution of mutual funds, which include, Tata Securities Ltd., Aditya Birla Finance Ltd., online and fintech platforms such as Zerodha and Cleartax, banks, fund houses and individual distributors/agents.

16. Considering the material on record, including details provided in the notice given under Section 6(2) of the Act and assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India and therefore, the Commission, hereby, approves the same under Section 31(1) of the Act.

17. This order may be revoked if, at any time, the information provided by the Parties is found to be incorrect.

18. The information provided by the Parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

19. The Secretary is directed to communicate to the Parties accordingly.