K Ram Kumar Four large shareholders of UTI Asset Management Company (UTI AMC) are hoping to get a relaxation in the time-frame from the Securities and Exchange Board of India (SEBI) for diluting their stakes in the mutual fund to 10 per cent each.

State Bank of India (SBI), Life Insurance Corporation of India (LIC), Bank of Baroda (BOB) and Punjab National Bank (PNB) have to bring down their stake by March 31, according to the deadline set by the market regulator. They have made a plea to the regulator for leeway on this front, sources said.

They are understood to have submitted a roadmap to bring down their stake in phases. The four shareholders — each having 18.24 per cent stake in UTI AMC — fear that if they try to sell 8.24 per cent each (collectively 32.96 per cent) in one-go, they may not be able to realise the full value of their investment. Hence, they are exploring the possibility of offloading their stakes in tranches. T Rowe Price International Ltd has 26 per cent stake in UTI AMC.

In accordance with SEBI regulation on mutual funds, no sponsor of a mutual fund can directly or indirectly have 10 per cent or more of the shareholding (cross-holding) or voting rights in the AMC or the trustee company of any other mutual fund; also, it cannot have representation on the board of the AMC or the trustee company of any other mutual fund.

UTI AMC is the country’s sixth largest mutual fund with average assets under management of ₹1,57,585 crore in the October-December 2018 quarter.

“Following submission of the roadmap, SEBI may allow an extension of time period for stake dilution. Some of the stakeholders have asked for two years forbearance because they feel that they cannot sell their stake at one-go,” said the source . They also want T Rowe Price to dilute its stake .

On the appointment of MD & CEO at the mutual fund, the source observed that no headway could be made as the promoters are not on the same page on the issue.

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