MUMBAI: Tata Asset Management is in talks to buy out the assets of JP Morgan’s domestic mutual fund business, said two people familiar with the discussions. If the deal goes through, JP Morgan will be the seventh global financial services firm to exit the Indian mutual fund industry in the last three years. In response to an ET query on the matter, a Tata Mutual Fund spokesperson said, “You would appreciate that as a group practice, we do not comment on market speculation”. JP Morgan declined to comment. Tata is said to be negotiating to pay less than 1% of JP Morgan Mutual Fund’s assets under management (AUM) of close to Rs 6,800 crore as on January 30. This could not be confirmed independently. Tata Asset Management has assets worth Rs 29,000 crore in the period. At 1%, JP Morgan Mutual Fund will be valued at closed to Rs 68 crore. The valuation under negotiations is lower than that of previous domestic transactions in the industry which have happened between 2% and 4% of the target’s AUM. “It is not clear how much of JP Morgan’s AUM will stay with Tata if the acquisition happens. JP Morgan’s schemes were sold by foreign banks because of the global empanelment. That may not happen if a domestic fund takes over,” said one of the people familiar with the development. JP Morgan is in a hurry to exit the domestic mutual fund business, which drew flak last year after the Amtek Auto fiasco, the person said. In 2015, investors in two debt schemes of JP Morgan Asset Management had borne the brunt of credit rating downgrades of troubled auto component maker Amtek Auto’s debt instruments. This followed a delay in repayment of debt to JP Morgan, which brought in restrictions on withdrawals by investors. After a wait, unitholders got back only 85% of the value of the segregated scheme, which held the Amtek bonds. Six foreign banks and asset managers have sold their Indian units in the last three years. Last year, Goldman Sachs sold its mutual fund entity to Reliance Capital. Before Goldman, Deutsche Bank sold its fund business to Pramerica. In 2014, Dutch financial services group ING sold its stake in ING Investment Management to Birla SunLife Mutual Fund. In 2012, HDFC Mutual Fund bought the assets of Morgan Stanley Asset Management. Bucking the trend, Canadian investor Prem Watsa bought 49.2% stake in Quantum Advisors, which operates Quantum Mutual Fund, in 2015 For Tata Asset Management, this is the first attempt to grow through the acquisition route in the mutual fund business. Tata is looking to aggressively grow its asset management business and hired R Ganesh, former managing director of BlackRock, as the chief executive officer last year. Foreign firms are selling off their Indian mutual fund business as they are reeling under losses and have been unable to scale-up the domestic business on expected lines. Mutual fund industry officials said most of them are existing ‘unrelated and non-strategic’ businesses in emerging markets and Asia.