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UTI Asset Management Company has received SEBI approval for launching an initial public offer (IPO), becoming the third fund house after Nippon India Mutual Fund and HDFC Asset Management Company to get listed on exchange.
The issue of 38,987,081 equity shares — put for sale by the existing investors — is expected to raise about ₹3,000 crore and constitute 30.75 per cent of the post-offer paid-up capital of the fund house.
Among the current investors, SBI will sell 10,459,949 equity shares, LIC 10,459,949 shares, Bank of Baroda 10,459,949 shares, Punjab National Bank 3,803,617 shares and T Rowe Price International 3,803,617 shares.
Of the overall issue, 2 lakh shares will be reserved for employees. The price band and minimum bid lot will be decided UTI AMC soon. It will be listed on both the BSE and the NSE.
UTI AMC has appointed Kotak Învestment Banking, ICICI Securities, JM Financial, SBI Capital Market, Axis Capital, Citi Global Markets India, Kfin Technologies and BofA Securities as book running lead manager.
SEBI norm violation
The stakeholding of SBI, BoB, and LIC in UTI AMC was in violation of an amendment to SEBI MF Regulations, made on March 13, 2018, that mandated an asset management company to be a sponsor and stakeholder holding 10 per cent or more of only one mutual fund, thereby the reducing cross-holding in any other AMC to less than 10 per cent.
SEBI had given a one-year deadline for the fund house to comply with the regulation. All the three public sector entities have their own mutual fund subsidiaries.
The deadline for the three PSU entities ended in March 2019 and it was extended twice till December due to weak market sentiment.
The fund house had filed papers for IPO last December and the approval was delayed as it did not have a CEO.
CEO appointment
Last week, UTI AMC confirmed the appointment of acting CEO Imtaiyazur Rahman as Chief Executive Officer.
Rehman was the internal candidate for the position, which fell vacant after Leo Puri completed his five-year term in August, 2018. He joined the UTI Group in 1998 and has been with the AMC since 2003.
UTI AMC is the seventh-largest asset management company in India in terms of mutual fund QAAUM (quarterly average assets under management) with asset base of ₹1.51 lakh crore as of March quarter. It manages domestic mutual fund schemes, comprising equity, hybrid, income, liquid and money market funds.
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