STT in Talks for India Mutual Fund Stake: Aligns With Growth Strategy?

After partnering with smallcase earlier this year to expand in India’s fintech sector, State Street’s STT investment management division now seeks to expand in the country’s rapidly growing $900-billion asset management market. Per a Bloomberg report, citing people with knowledge of the matter, STT is in advanced talks to acquire a stake in a mutual fund in India.

As part of the deal, State Street will bring in its proprietary technology and capabilities to combine with the Indian partner’s distribution network. The company is also preparing to introduce model portfolios comprising international equities and exchange-traded funds (ETFs).

By undertaking various business restructuring and inorganic growth efforts, State Street has been expanding its scale over the last few years. Last month, STT acquired global custody and related businesses outside of Japan from Mizuho Financial Group. In April 2025, it partnered with Ethic Inc. to offer customized investment solutions to institutional and financial intermediary clients.

Last year, State Street joined forces with Bridgewater Associates to boost its core alternative investment strategies, partnered with Apollo Global to enhance investors' accessibility to private markets, acquired a 5% stake in Australia-based Raiz Invest Limited, and partnered with Taurus and CF Global Trading. Moreover, STT restructured the nearly 20-year-old European component of the International Financial Data Services LP joint venture (JV) arrangement in Luxembourg and Ireland, and consolidated its India-based operations to assume full ownership of its two JVs.

These efforts are expected to result in revenue and cost benefits for the company. Over the last four years (2020-2024), STT’s revenues witnessed a compound annual growth rate of 2.7%, with the upward trend continuing in the first nine months of 2025. The Zacks Consensus Estimate for the company’s 2025 and 2026 revenues is pegged at $13.82 billion and $14.46 billion, respectively, indicating year-over-year growth of 5.7% and 4.7%.

Like STT, Other Finance Firms Seeking India Expansion

In order to capitalize on the convergence of rising affluence, favorable demographics and digital transformation in India, BlackRock Inc. BLK entered a JV with Jio Financial in July 2023, naming it Jio BlackRock. This 50:50 partnership combined the scale and investment expertise of BlackRock with the local market knowledge and digital infrastructure capabilities of Jio Financial.

In May 2025, the JV received final approval from the Securities and Exchange Board of India to start mutual fund operations.

Likewise, HSBC Holdings plc HSBC is significantly ramping up its India strategy. The firm is opening new branches, focusing on affluent and ultra-affluent clients, re-entering private banking, launching innovation banking, and treating India as a top growth market.

Last year, HSBC’s India branch announced a strategic partnership with Bajaj Allianz General Insurance, one of the leading private general insurers in India. The aim of the bancassurance partnership was to offer Bajaj Allianz’s comprehensive suite of insurance products and services to HSBC’s vast customer base in India, based on a shared vision of financial inclusion and customer empowerment across the country.

STT’s Price Performance & Zacks Rank

Over the past six months, STT shares have gained 27.8%, outperforming the industry’s 17.7% growth.

State Street currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research