The Rs 2,160-crore initial public offering of UTI Asset Management Company was subscribed around 2.3 times till the final day of bidding. The IPO of UTI AMC opened for subscription on September 29 and ended on October 1 in a price range of Rs 552-554 per share. The issue received bids for 6.31 crore equity shares compared to the size of 2.73 crore shares.
In a move to divest the stake held by its five shareholders from 100% to 69.2%, State Bank of India (SBI), Life Insurance Corporation (LIC), and Bank of Baroda offered to sell 1,04,59,949 shares each, while Punjab National Bank (PNB) and T Rowe Price International offloaded 38,03,617 shares each.
The IPO was an offer for sale of 3,89,87,081 equity shares, or 30.75 per cent stake by the company's existing investors to raise Rs 2,152-2,160 crore.
Shares of the company are proposed to be listed on BSE and NSE on October 12. The unblocking of funds from ASBA account will start around October 8 and the shares will be credited to the account of eligible investors by October 9. This will be the third AMC to get listed on the stock exchanges after Nippon Life India Asset Management and HDFC AMC.
The allotment for the shares is expected to be known by October 7/ October 8. Those who had bid for the issue can check the subscription status on the online portal of KFin Technologies, the registrar to the issue.
Here's how to check UTI Asset Management Company (AMC) IPO allotment status
On KFin Technologies
- Go to the online portal
-Click on the drop-down menu and select the company name as UTI Asset Management Company (AMC) in the drop-down menu of the investor's centre section.
- Enter your Permanent Account Numbers (PAN) or application number or Client ID.
- After entering the given captcha code, investors can click on submit button and view their allotment status.
Applicants can also check their IPO allotment status on the BSE website
-Select Equity and then from the dropdown, select issue name- UTI.
-Enter your Permanent Account Numbers (PAN) or application number and click Search
Kotak Mahindra Capital Company, Axis Capital, Citigroup Global Markets India, DSP Merrill Lynch, ICICI Securities, JM Financial and SBI Capital Markets are the book running lead managers to the offer.
As of September 30, 2019, the company had the largest share of monthly average AUM. According to Crisil Research, UTI AMC had the second-highest market share by AUM of PMS services in India.
Here's what analysts say about the IPO:
HDFC Securities in its note said," Its Domestic Mutual Fund QAAUM was Rs1,336.3 billion as of June 30, 2020. UTI AMC has the highest proportion of its monthly average AUM as of June 30, 2020, attributable to B30 cities of the top ten asset management companies in India as of June 30, 2020. UTI AMC's size and diverse client base, coupled with its strong product portfolio and, particularly in B30 cities, extensive distribution network and widely recognized brand, position it to capitalise on future growth in the Indian mutual fund industry."
Nirmal Bang Institutional Equities in its note said," Even though we are positive on the industry prospects from a long-term perspective, we take cognizance of some of the near-to-medium term headwinds. We think the IPO pricing is undemanding given the valuation HDFC AMC and Nippon AMC are currently commanding. We shall take a call on the stock rating at a later stage."
Canara Bank Securities in its note said," UTI AMC's PE stands at 25.73x FY20 as com-pared to HDFC AMC's and Nippon Life AMC's PE of 35.43x and 37.06x FY20 respectively. Hence, we recommend to Subscribe UTI AMC IPO for listing as well as long term gains."
Geojit in its note rated Subscribe to the UTI AMC IPO and said," Company's national footprint with a presence in many metropolitan and rural areas, and particular strength in B30 cities, has allowed them to leverage the UTI name and establish UTI as a brand which is recognised across the country.
Jaikishan Parmar- Sr. Equity Research Analyst, Angel Broking said,"UTI AMC's operational profitability is lower vs. listed peers primarily owing to higher cost. With the growth in AUM, we expect the cost to grow at a slower speed, which will benefit operating leverage and will help the company to improve EBITDA margins. At the upper end of the IPO price band, it is offered at 25.4x its FY20 earnings and 5.25% of Q1FY21 QAAUM, demanding 7,024cr market cap, which we believe is reasonable. Further, listed peers like HDFC AMC trades at 35x FY20 earnings and Nippon AMC trades at 37x FY20 earnings. Additionally, HDFC and Nippon AMC trade at 12.56% and 8.55% of Q1FY21 QAAUM, respectively. Considering attractive valuation, huge growth potential of MF industry, asset-light business and higher dividend payout ratio, we are positive on this IPO and rate it as SUBSCRIBE."
LKP Securities in its note said," At higher price band (Rs554), the stock is valued at 25.7(x)FY20 Earnings. Comparing with peers like HDFC AMC and Nippon AMC which are trading at 35.2(x) and 35.0(x)FY20 Earnings respectively due to higher ROE. We still believe that UTI AMC is lucrative and we recommend to SUBSCRIBE."
Nirali Shah, Senior Research Analyst, Samco Securities said,"UTI has received a mandate to manage 55% of EPFO in 2019 which has significantly boosted its AUM. This AMC has delivered decent returns and profit margins in the past few years with a Mcap to Equity QAAUM of 18% compared to HDFC AMC's 29%. Additionally, this year itself it granted ESOPs at Rs. 728/share while its price band is at Rs. 552-554/share which means it leaves more money on the table for investors for listing gains."
Centrum Broking said, "We are optimistic about the AMC space as asset management, being a fee-based business is slated to grow (QAAUM) at an 18% CAGR in the medium term led by overall economic growth, growing investor base and higher disposable income levels. Recent regulatory changes such as revised expense ratios would lower costs for mutual fund investors which should aid in greater retail participation. Valuation is attractive with P/E at 25.4x FY20 EPS."
"At the higher end of the price band, UTI AMC's IPO is priced at a PE ratio of 25.41, based on FY20 earnings. This is at a significant discount to listed peers HDFC AMC (trading at PE of 36) and Nippon Life (PE of 37). Given its relatively weaker profitability and growth ratios, this seems to be justified. UTI AMC operates at higher operating costs versus peers, which has taken a toll on its profitability. We believe that one can subscribe to this IPO purely from the chances of achieving listing gains," INDmoney said.Share Market News Live: Sensex rises 250 points, Nifty at 11,490; TCS, HCL Tech, Maruti top performers
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