The deal, whose financial terms were not disclosed, was carried out through a bidding process conducted by a joint committee of stock exchanges comprising the National Stock Exchange, BSE, and the Metropolitan Stock Exchange of India.
Karvy managed 11.98 lakh folios with assets under management (AuM) of INR 9,261m as of July 2021.
It is said to have 4.2 lakh Systematic Invest Plans bringing in INR87m every month. It also has a sub-distribution network of more than 5000 mutual fund distributors.
Prudent offers personal and corporate investment planning services through the distribution of mutual funds, bonds, broking and insurance products.
Prudent Corporate CEO Shirish Patel said that the acquisition would help the firm strengthen its presence in the retail financial product distribution space.
TA Associates-backed Prudent specialises in personal and corporate investment planning services. It sells mutual funds, bonds, broking and insurance products through its distribution network.
The firm recently filed the draft papers for its initial public offering, which is to be launched in the second half of this month.
The size of the IPO is expected to be about $67.4m (INR500m).
As part of the IPO, TA, which took a minority stake in the firm in 2018, will exit its holdings.
Commenting on the deal, Prudent Corporate chairman and managing director Sanjay said: “Acquiring Karvy’s MF folios shows our commitment towards growing our geographic reach by both expanding our distribution network and deepening our existing presence. It reinforces our belief in the retail wealth management sector in India.”
Earlier this year, Asia-focused investment group PAG purchased a 61.5% stake in Edelweiss Wealth Management, the wealth management business of India’s Edelweiss Group.