IDBI Mutual Fund, initiated by IDBI Bank, has agreed with LIC Mutual Fund to move its scheme to the final stage, the bank said. The filing mentioned the verdict had been booked to conform to Section 7B of the Securities and Exchange Board of India’s (SEBI) Mutual Fund Regulations.

As per the regulations, the guarantor of a mutual fund and the asset managing company of the mutual fund cannot separately, collectively, directly or indirectly hold over 10% of the shareholding or voting rights in an alternative asset management company or the trustee company. At the time of a merger or an acquisition, sponsors of fund houses constitute one year to obey the norms.

The SEBI norms entered into play after Life Insurance Corp of India (LIC) acquired IDBI Bank in January 2019. While IDBI Bank is the guarantor to IDBI Mutual Fund, LIC owns its own fund house, LIC Mutual Fund. As of September 30, LIC holds a 49.24% stake in IDBI Bank.

IDBI Mutual Fund has a total of 22 structures as of November 30. Its average assets under supervision were Rs 3,761.4 crore, and LIC Mutual Fund’s average assets were erected at Rs 17,879 crore in July-September.

While LIC has a most significant incidence in the debt and passive equity products space, IDBI MF is vital in the actively accomplished equity funds space. Insufficient schemes in the equity space – large cap, tax saver large and midcap, and flexi cap – are mutual between the two. IDBI MF has attentive, value, midcap, health care and small-cap schemes, which are not present in the LIC portfolio.