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SBI, LIC and Bank of Baroda to Sell 8.25% Stake Each in UTI AMC IPO

Representative Image. (Reuters)

Representative Image. (Reuters)

The IPO comes at a time when the mutual fund industry is struggling under redemption pressures, resulting in outflow from schemes and declining systematic investment plan (SIP).

The initial public offering (IPO) of UTI Asset Management Company will hit the exchanges next week. The price band of the offer has been fixed at Rs 552-554 per equity share and the three-day sale, which aims to raise Rs 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 redemption pressures, resulting in outflow from schemes and declining systematic investment plan (SIP).

The June quarter was challenging for domestic mutual fund industry as active equity inflows fell while contributions from SIPs shrunk due to a correction in the stock markets amid volatility.

As part of the offer, State Bank of India, Punjab National Bank, Bank of Baroda, Life Corporation of India, and T Rowe Price International will trim their stake in UTI AMC. SBI, BoB, and LIC will divest 8.25% stake each while T Rowe Price International and PNB will sell 3% each through the issue.

The offer and net offer would constitute at least 30.75% and 30.59% of the post-offer paid-up equity share capital of the company, respectively. According to red herring prospectus, SBI, LIC, BoB, and PNB each hold 18.24% stake while T Rowe has 26% shareholding in UTI AMC.

“The offer consists of an initial public offer of up to 38,987,081 equity shares by the selling shareholders comprising an offer for sale of up to 10,459,949 equity shares by State Bank of India, up to 10,459,949 equity shares by Life Insurance Corporation of India, up to 10,459,949 equity shares by Bank of Baroda, up to 3,803,617 equity shares by Punjab National Bank and up to 3,803,617 equity shares by 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 book running lead managers to the offer.


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