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Saturday, Feb 16, 2002

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Pioneer ITI close to finalising buyers

Aarati Krishnan

CHENNAI, Feb. 15

THE two key stakeholders in Pioneer ITI Asset Management Company — the TCK Leasing and Financial Services group and Pioneer Investment Management Inc of the US, have decided to jointly put their stake in the AMC (asset management company) up for sale and are soon expected to finalise a buyer.

Sources in Pioneer ITI AMC confirmed this development and said that the due diligence process was likely to be completed soon. "While a handful of reputed asset management companies are in the fray, we expect to finalise the final bidder within the next four to six weeks. Negotiations are currently on," sources within the mutual fund said.

Estimates of the total consideration for stake sale are as yet unavailable. However, Pioneer ITI AMC is among the earliest private sector entrants into the mutual fund business in India and has a well-established brand name. It manages assets of Rs 4,000 crore and has one of the largest retail investor bases among mutual funds in the country at 7.4 lakh investors.

The AMC has also been a profit-making company over the past three years. In the financial year 2000-01, it made a net profit of Rs 1.42 crore on total revenues of Rs 34.72 crore. Roughly 66 per cent of the revenues were from asset management fees from the schemes, while the balance was derived from investor servicing fees.

Both the revenue and profit performance were an improvement over the previous year. In 1999-2000, the AMC reported a net profit of Rs 0.67 crore on total revenues of Rs 18.93 crore.

The Investment Trust of India (now controlled by Mr Sanjay Maloo of TCK Leasing and Financial Services) holds a 47.7 per cent stake in the AMC. Pioneer Investment Management Inc US holds a 47.6 per cent stake. The remaining 4.68 per cent stake is held by the employees of Pioneer ITI AMC.

The recent developments should be seen in light of the fact that Pioneer Investment Management Inc has recently become part of UniCredito Italiano, one of Italy's largest banking companies, after its takeover by the latter last year.

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