UTI Asset Management Company, India's biggest public sector mutual fund house, has filed draft red herring prospectus with markets regulator SEBI to float an initial public offering. After Reliance Nippon Life Asset Management and HDFC Asset Management, it would be the third entity from the mutual funds industry to go public.
The IPO will be entirely an offer for sale (OFS) by the institutional shareholders, led by State Bank of India (SBI), Life Insurance Corporation (LIC), Bank of Baroda (BoB), and Punjab National Bank (PNB). These four state-owned banking and financial institutions hold 18.25 per cent each in the company, while the remaining stake is held by US-based T Rowe Price International.
As per media report, UTI AMC's IPO is estimated to raise around Rs 3,800-4,800 crore, which would value the asset manager at around Rs 12,000-15,000 crore.
SBI, Bank of Baroda and LIC will sell 1.04 crore shares each, while PNB and T Rowe Price International will offload 38.03 lakh shares, the report said.
The equity shares will be listed on BSE and NSE.
The company has appointed Kotak Mahindra Capital Company, Axis Capital, Citigroup Global Markets India, Bank of America Securities, ICICI Securities, JM Financial and SBI Capital Markets as the Book Running Lead Managers to the offer.
As of September 30, 2019, UTI AMC is the seventh-largest asset management company in India in terms of mutual fund QAAUM (quarterly average assets under management), according to Crisil. The rating agency expects QAAUM of the Indian mutual funds industry to grow at a CAGR of 17-19 per cent between September 30, 2019 and March 31, 2024, amounting to Rs 54-58 lakh crore.
For the financial year ended March 2019, UTI AMC's net profit was down 3 per cent at Rs 350 crore against Rs 360 crore in the previous fiscal. The total income was down 7 per cent at Rs 1,080 crore compared to Rs 1,160 crore recorded in last year.
Edited by Chitranjan Kumar