So it did come as a surprise when, last week, Religare Enterprises (promoted by the former promoters of Ranbaxy) decided to acquire a majority stake in the ailing Lotus India Asset Management Company.
This is the first deal in India since the financial crisis caused the market to crash 23 per cent in October, and Lotus' assets under management from Rs 7,000 crore (Rs 70 billion) to about Rs 5,000 crore (Rs 50 billion).
At a time when most mutual funds are facing severe redemption pressure, Religare is believed to have got the new acquisition quite cheap.
The man behind the deal is Sunil Godhwani, a qualified chemical engineer who heads Religare. While Godhwani will not comment on the price he paid, reports suggest the deal was struck at 1-2 per cent of the AUM, which works out to Rs 50-110 crore (Rs 500 million-Rs 1.1 bilion).
The major shareholders in Lotus India are foreign institutional investors Fullerton Fund Management Company and Sabre Capital.
For Godhwani, the deal has meant a 15-month head-start for Religare in the asset management business.
Without Lotus, Religare's entry into the Indian mutual fund business would have been through its recently-launched Religare-AEGON Mutual Fund, a joint venture between Religare Enterprises and the Netherlands-based global mutual fund leader AEGON.
Since Religare-AEGON
is yet to launch its maiden fund, the company would have taken several months to launch funds. Once the deal gets regulatory clearance, Religare will be able to enter the overcrowded Indian mutual funds market with 30-35 funds that belonged to Lotus.
This is the second time Godhwani is attempting to enter newer markets through acquisition of established entities.
In May 2008, Religare created a history of sorts when it acquired Britian's oldest stock broking firm Hichens, Harrison & Co through Religare's UK unit, Religare Capital Markets International Ltd.
The Hichens acquisition helped Religare create an international distribution network for its domestic institutional business.
It also ensured that Religare has, almost overnight, built credibility and presence in about a dozen countries, which on its own would have taken it several years.
The integration of Lotus and Religare-AEGON under the Religare brand will be the next immediate task before Godhwani.
Though Religare Enterprises holds the entire stake in Lotus, AEGON will have to be taken into confidence before the integration process begins. Sources familiar with Godhwani's ways say he is already on the job.
In a separate move, Religare has announced plans for a rights issue to raise Rs 1,800 crore (Rs 18 billion) for funding its growth plans.
There may be a slowdown and a financial crisis, but seeing Godhwani, you wouldn't suspect that is the case.
