MUMBAI: The long awaited initial public offering (IPO) of UTI Asset Management Company will hit the markets next week. The offer price band has been set at ₹552-554 per share of capital and the three-day sale that aims to increase ₹2,152-2,160 crore will close for subscription on October 1.
The IPO comes at a time when the mutual fund industry is struggling under bailout pressures, resulting in a scheme exit and a declining systematic investment plan (SIP).
The June quarter was challenging for the domestic mutual fund industry, as inflows of active stocks fell while systematic investment plan (SIP) contributions declined due to a correction in equity markets amid the volatility.
As part of the offering, State Bank of India, Punjab National Bank, Bank of Baroda, Life Corporation of India and T Rowe Price International will cut their stake in UTI AMC. SBI, BoB and LIC will divest 8.25% each, while T Rowe Price International and Punjab National Bank will sell 3% each through the issue.
The offer and the net offer would constitute at least 30.75% and 30.59% of the capital stock paid up after the company’s offer, respectively. According to the red herring prospect, SBI, LIC, BoB and PNB each have an 18.24% stake, while T Rowe has a 26% stake in UTI AMC.
“The offering consists of an initial public offering of up to 38,987,081 shares of capital by the selling shareholders comprising an offer to sell of up to 10,459,949 shares of capital by State Bank of India, up to 10,459,949 shares of capital by Life Insurance Corporation of India , up to 10,459,949 shares of Bank of Baroda, up to 3,803,617 shares of Punjab National Bank and up to 3,803,617 shares of T. Rowe Price International Ltd, “it said in a statement.
Kotak Mahindra Capital Company Limited, Axis Capital Limited, Citigroup Global Markets India Private Limited, DSP Merrill Lynch Limited, ICICI Securities Limited, JM Financial Limited and SBI Capital Markets Limited are the main managers of the offering.
UTI AMC is India’s second largest asset management company in terms of total assets under management and is India’s eighth largest asset management company in terms of QAAUM (Quarterly Average Assets Under Management) mutual funds as of June, according to Crisil.
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