L&T Finance Holdings Limited (BSE:533519) is in advanced talks with HSBC Holdings plc (LSE:HSBA) to sell its mutual fund (MF) arm, according to news reports. According to a report by Moneycontrol, the sale of L&T Mutual Fund has been in the works for a while. In 2020, Blackstone Inc. (NYSE:BX) emerged as the frontrunner for a INR 32 billion acquisition of L&T Investment Management Limited (L&T Mutual Fund), but the deal closure would hinge upon approval from the capital markets regulator, which generally frowns upon private equity ownership of mutual funds.

Market experts believe Securities and Exchange Board of India's (Sebi) approval might prove to be a problem.