Aditya Birla Sun Life Asset Management Company has thrown its hat in the ring to acquire majority stake in the UTI AMC and shore up its asset under management.

The fund house will be vying with Tata AMC and others to acquire 45 per cent stake being offloaded by Bank of Baroda, State Bank of India and Punjab National Bank, besides Life Insurance Corporation of India.

Being one of the four listed asset management companies, Birla MF has surplus cash of ₹2,200 crore on its books and it is almost debt-free company. The 45 per cent stake in UTI MF will be valued at over ₹4,600 crore, sources said.

Both Aditya Birla Sun Life AMC and UTI AMC did not respond to the e-mail sent by BusinessLine.

If the deal goes through, Birla MF will be ranked among the top three from being the fifth largest currently. Birla MF registered an average asset under management of ₹2.82 lakh crore as of June-end while UTI AMC had an asset of ₹2.24 lakh crore in the same period.

SBI MF tops the table with an asset of ₹6.47 lakh crore followed by ICIC MF and HDFC MF with ₹4.65 lakh crore and ₹4.15 lakh crore assets as of June-end.

T Rowe Price, one of the early investors in UTI AMC, is the largest shareholder with 22.97 pet cent stake.

Bank of Baroda and State Bank of India which had about 18 per cent stake each in UTI AMC brought it down to 9.98 per cent when the UTI AMC went public in 2020. Insurance behemoth LIC also diluted its holding to 9.98 per cent during UTI AMC’s IPO. PNB holds 14.99 per cent.

Other mutual funds that own a stake in UTI AMC include Mirae MF (4.65 per cent), Invesco MF (1.81 per cent), ICICI Prudential MF (1.47 per cent) and HDFC MF (1.14 per cent).

Public Sector Banks (PSBs) are looking to dilute their investment in UTI AMC as the RBI recently nudged them to raise fresh capital to meet growing credit demand.

Shaktikanta Das, Governor, Reserve Bank of India recently said that the domestic banks should raise additional capital to be ready for the worst-case situations given the hazy nature of the global financial climate.

“We have to envisage the maximum amount of stress and do our best. They should always be prepared. Based on these analyses, banks should raise capital,” he said. “We are seeing steady growth in demand for loans. If banks are to sustain lending within this loan demand, they will have to raise additional capital,” he added.