Global financial services major Manulife enters India in a joint venture with Mahindra Finance

• Canada-based global investment firm Manulife forms a 51:49 partnership with Mahindra Finance.
  
• Manulife will invest $35 million for 49% stake in the JV.
  
• Mahindra Finance stock tumbled nearly 3% after the announcement.
  
• Mahindra Finance does not rule out the possibility of entering general insurance.

Mahindra Finance on Thursday announced a joint venture with Canadian fund Manulife, with its subsidiary Mahindra Asset Management Company.

The 51:49 joint venture aims to expand the depth and breadth of fund offerings and retail fund penetration in India.

Manulife will invest $35 million for 49% stake in the JV, which would value the Mahindra AMC at about $71 million.

The investment from Manulife will go into the asset management company, not Mahindra Finance, according to Ramesh Iyer, Vice Chairman and Managing Director, Mahindra Finance. "General insurance is an opportunity we are looking at," he added.

The mutual fund business in India is a crowded place and the top few players control a lion's share of the market. "Even if we double our market share from the current 4%, the business will grow substantially," Ashutosh Bishnoi, MD and CEO of Mahindra AMC said, adding that the company is looking to create new segment of investors, and not looking to snatch from other players.

"Our desire is to become a top tier mutual fund in India," said Michael Dommermuth,head of Manulife AMC in Asia. The firm has $849 billion funds under management globally.

About 28% of Mahindra AMC's retail assets are outside the top 30 cities in India.

Of the ₹5000 crores, nearly ₹3000 crores are institutional investments.