Ocean Dial, the fund manager of India Capital Growth Fund (IGC ), has been snapped up by AssetCo (ASTO), the investment consolidation vehicle of Abrdn founder Martin Gilbert (pictured above).

AssetCo is paying £4.125m in cash and shares for London-based Ocean Dial Asset Management (ODAM) which runs £227m of assets. These are split between the London-listed IGC trust managed in Mumbai by Gaurav Narain and the $110m Ocean Dial Gateway to India  open-ended fund run by his colleague Tridib Pathak.

AIM-listed AssetCo, which has £2.8bn of assets after a string of acquisitions including River and Mercantile last  year, is buying the business from Avendus Capital Management. It bought Ocean Dial in 2017 and will receive £2.1m in cash and 2.9m shares in AssetCo, which Avendus chief executive Gaurav Deepak said it would retain as a long-term partnership.

Elisabeth Scott, chair of India Capital Growth, welcomed the deal which leaves the mid-cap equities portfolio in the hands of Narain (below) but should see the trust benefit from AssetCo’s centralised sales and marketing team.

‘The board of ICGF supports this transaction and welcomes ODAM’s move in ownership to a more fully resourced UK asset management group,’ she said. 

Gilbert, founding chair of AssetCo, said: ‘We are excited about the long-term potential that India offers and see opportunities to add value by bringing Ocean Dial together with the other active equity asset management businesses we are combining under the River and Mercantile brand.’

David Cornell and Robin Sellers will step down as UK directors of ODAM but Swati Jain, the boutique’s global head of sales & distribution will remain to work alongside the management team of AssetCo.

AssetCo shares firmed half a penny to 68.5p, valuing the business at £95m.

After an initial spike, India Capital Growth slipped back broadly unchanged at 118.5p. The shares stand on a 13% discount below net asset value (NAV) but have soared 91% in the past three years.

This is ahead of the underlying NAV growth of 64.8% and the India BSE Midcap index return of 64.5%, according to Numis Securities data.

The wide discount looks potentially attractive ahead of a redemption facility later this year which will allow investors to sell back their shares at a 3% discount.

Numis analyst Priyesh Parmar said: ‘We think at around three times revenues and around five times pro-forma ebit [earnings before interest and tax], this looks like a sensibly-priced deal, in context of industry norms for deals of this nature.’

Gaurav Narain is presenting at a Citywire virtual event at 11am this Thursday. To hear his explanation why ‘India’s growth has only just begun’ REGISTER HERE.