Dharmesh Mehta, Managing Director, CEO, Axis Capital, and Vikas Khemani, former CEO Edelweiss Securities, have bid for the brokerage and investment banking division (IBD) of IDFC.

According to sources, IDFC has received bids from a few other financial services companies in Mumbai. BusinessLine could not confirm the other names. The bidding closed at 5 pm on Tuesday. IDFC has been making efforts to sell what it considers as non-core assets after it decided to merge with non-banking finance company Capital First.

When contacted, Mehta declined to comment and Khemani confirmed he had put in a bid.

Eyeing ₹500-cr deal

It is likely that IDFC’s brokerage and IBD may fetch more than ₹500 crore. Domestic institutions have to be re-empanelled when the business changes hands and IBD is mainly a people-oriented business, which is the key to cut deals, experts say. Still the valuation will mainly depend on the earnings that IDFC will be able to retain after it changes hands.

IDFC was also in talks to sell its mutual fund business that has assets under management (AUM) of around ₹70,000 crore. AMCs usually attract buyers at 4-5 per cent price of the AUM. In some cases, the deals have been stuck for lower than this price depending the risk assets AMCs carry in their portfolio.

Mehta, a capital market veteran, had joined Axis as part of ₹1,396-crore deal to purchase Enam, which decided to sell its equity broking and IBD post Lehman crisis. Mehta has been instrumental in handling over 200 equity offerings, including IPOs and other placements. If his bid for IDFC is accepted, Mehta will be among the last top officials, who had come with Enam deal, to quit Axis. Mehta’s exit from Axis could lead to exodus of more officials from the company to join him, the sources said.

Khemani resigned from Edewleiss this year after 17 years at the financial services company that was started as a brokerage firm by its founder Rashesh Shah.

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