UTI Asset Management set for an IPO
After two years of debates with the government, the country’s oldest and the sixth largest asset management company—UTI Asset Management Co. Ltd—is finally set to launch its initial public issue (IPO), with an offer to sell 26-30% of the company’s shares to the public from the stake held by the AMC’s four state-run sponsors—State Bank of India, Bank of Baroda, Punjab National Bank and Life Insurance Corp. of India (LIC).
Three persons with direct knowledge of the matter confirmed this, stating that all the four sponsors have informally agreed to dilute their stakes in UTI through an IPO, which is planned to be launched this financial year.
The size of the IPO could be around ₹2,500 crore and the four state-run shareholders, each of which holds 18.5% in UTI, will sell stakes in equal amounts in the IPO. UTI AMC is valued at ₹8,000-10,000 crore, said the first person.
Around a fortnight back, ICICI Securities Ltd. has been asked by UTI to advise the four state-run shareholders of UTI about the potential stake dilution.
While the four state-run companies hold 18. 5 % each, 26% is held by Baltimore-based asset manager T Rowe Price.
“ICICI Securities has been involved in advising the shareholders about a potential listing. Around 82% of our shareholders have agreed to list. ICICI Securities will advise the four PSU shareholder-cum-sponsors on the quantum of stake dilution required, estimated valuation of the stake and other details involving the exit of the four PSU shareholders from UTI eventually,” said the first person.
“ICICI Securities have held discussions with the shareholders over the last two weeks. A formal mandate for an IPO can be given only after all the necessary approvals are in place,” said the second person.
While announcing the annual results, SBI chairman Arundhati Bhattacharya last week said, “We have already determined to IPO SBI life. Dialogue under general insurance is already under the process... Over and above this, our investment in UTI is also being discussed. If it goes for IPO, that is an area where we would dilute some amount of share for sale.”
However, replying to an email, an SBI Spokesperson said, “No decision on dilution of stake in UTI AMC has so far been taken. Any decision in this regard will be informed at the appropriate time.”