By: ENS Economic Bureau | Mumbai | Updated: December 20, 2019 4:22:22 amIt is the seventh largest asset management company in India in terms of mutual fund assets as of September 2019, according to rating agency Crisil.
Its total AUM was Rs 154,230 crore
After a long delay, UTI Asset Management Company (UTI AMC), a leading asset management firm, has filed its offer document with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) of up to 3.89 crore equity shares of face value of Rs 10 each at a premium.
The fund’s US-based strategic investor T Rowe Price International is also selling part of its stake in the IPO.
Life Insurance Corporation of India (LIC), Bank of Baroda (BoB) and State Bank of India (SBI) — which manage their own existing AMCs and hold 18.24 per cent each in UTI AMC — are selling 1.04 crore shares of UTI AMC through the IPO.
Punjab National Bank (PNB) and T Rowe Price International are also selling 38 lakh shares of UTI.
The net offer would constitute around 30.59 per cent of the post-offer equity capital of UTI AMC.
PNB, which exited its AMC joint-venture last year, also owns 18.24 per cent stake.
As the crossholding rules of Sebi apply to all the four promoters, SBI, LIC and BoB will have to bring down the stake in UTI AMC, also known as UTI Mutual Fund, to below 10 per cent and give up board seats as they also have their own AMCs.
T Rowe Price holds the remaining 26 per cent stake in UTI Mutual Fund. In March 2018, Sebi had introduced crossholding limits in mutual funds to eliminate potential conflicts of interest.
The markets regulator then mandated that if a shareholder has more than 10 per cent interest in a mutual fund, it cannot hold a similar-sized stake in another fund house and would also have to give up its board positions.
Sebi has been insisting that UTI’s four domestic shareholders will have to pare their stakes to less than 10 per cent each and rejected the requests of shareholders for extension of stake sale.
“However, as UTI Mutual Fund didn’t have a chief executive, it was unable to push for an IPO through which the four promoters could have offloaded their stake.
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The board of the UTI Mutual Fund couldn’t appoint a full-time CEO after Leo Puri’s tenure ad MD ended last year,” said an official.
UTI AMC and its predecessor — Unit Trust of India — have been active in the asset management industry for more than 55 years, having established the first mutual fund in India.
UTI AMC is the seventh largest asset management company in India in terms of mutual fund assets as of September 2019, according to rating agency Crisil.
Its total assets under management (AUM) was Rs 154,230 crore.
It also had the largest share of monthly average AUM attributable to B30 cities of the top ten Indian asset management companies as of March 31, 2019, according to Crisil.
UTI AMC’s consolidated total income equalled Rs 500 crore and Rs 520 crore for the six-month periods ended September 2019 and 2018, respectively, and Rs 1080 crore, Rs 1,160 crore and Rs 1050 crore for the fiscals ended March 2019, 2018 and 2017, respectively.
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