UTI Mutual Fund plans to bring its IPO sometime in the second half of the next year. The mutual fund’s Managing Director Leo Puri is confident of getting regulatory approvals for UTI Mutual Fund IPO by this time. “We continue to believe IPO will happen in the second half of 2017. We are awaiting Government go-ahead. Once that is in, we’ll appoint merchant bankers and seek Sebi nod,” Puri told PTI in an interview.
UTI Asset Management Company (UTI AMC), created by breaking up the erstwhile Unit Trust of India, is looking at a valuation of over USD1 billion (INR6,700 crore) and plans to use the IPO proceeds for inorganic growth. Through acquisitions, it plans to reclaim the prime position it had enjoyed before the US 64 scheme went bust in early 2001.
The UTI Mutual Fund IPO will make it the first fund house to be listed in the country. At the same time, the IPO will offer an exit route to its four sponsors – State Bank of India (SBI), Life Insurance Corporation of India (LIC), Bank of Baroda (BoB) and Punjab National Bnak (PNB) – which own 18.5% each in UTI Asset Management Company. The remaining 26% is owned by US-based investment firm T Rowe Price which it acquired from the four sponsors in November 2009 for USD140 million (INR652 crore).
“We are yet to go in for valuation as it will be discovered by the market. But we are sure of our valuation topping USD1 billion. But the exact valuation will be determined as we go to the market for price discovery,”
– Leo Puri, Managing Director, UTI AMC
Puri added that the size of the public offer will depend on much the shareholders want to offload. It is clear that the state-owned financial institutions have a conflict of interest by already owing separate AMCs under their own umbrella.
Government to clear UTI Mutual Fund IPO
UTI Mutual Fund IPO has been actually pending for quite some time as we reported last year that the AMC was preparing for the public offer. However, timing of the IPO is something that will be decided by the government. “It has been pending with the Government for a long now. But now I hope that it would be coming anytime now,” adds Puri.