UTI Asset Management Co. Ltd (UTI AMC) on Thursday said it will launch its long-anticipated initial public offering (IPO) next week, hoping to capture the attention of investors at a time when equity markets have turned choppy.
The mutual fund company will offer its shares in the price band of Rs 552 -554 apiece. The three-day sale, which aims to raise Rs 2,160 crore in the upper price band, closes on October 1.
The IPO will see shareholders State Bank of India, Punjab National Bank, Bank of Baroda, Life Insurance Corporation of India and T Rowe Price International pare their shareholdings in UTI AMC. SBI, BoB and LIC will divest an 8.25% stake each, while T Rowe and PNB will sell 3% each. On an aggregate basis, all the existing shareholders will reduce their stake in UTI AMC by around 30.75%. According to the draft prospectus, SBI, LIC, BOB and PNB hold 18.24% each while T Rowe has a 26% stake in UTI AMC. The share sale comes when the mutual fund industry is struggling with redemption pressures resulting in outflow in schemes and decline in SIPs. The June quarter was challenging for mutual funds as active equity inflows declined while contributions from SIPs shrank due to a correction and volatility in the stock markets.
“We were planning to launch the issue in March, but it was delayed mostly due to the covid outbreak,” Imtaiyazur Rahman, chief executive officer of UTI AMC, said. Post pandemic, the company had to include additional information such as covid-related disclosure, dividend policy, pension liabilities and financial results in the prospectus.
Last year, Sebi had directed LIC, SBI and BoB to reduce their stakes in UTI AMC by December, failing which, the regulator would freeze excess voting rights.
