Four major shareholders plan further stake sale in UTI AMC

After diluting 6.5% each of their stakes in UTI Asset Management in favour of US-based T Rowe Price Group, four major shareholders of UTI AMC?State Bank of India, Life Insurance Corporation, Bank of Baroda and Punjab National Bank?are planning to opt for a second round of disinvestment in the company.

Written by Kumud Das

January 21, 2010 22:47 IST

After diluting 6.5% each of their stakes in UTI Asset Management in favour of US-based T Rowe Price Group (TRP), four major shareholders of UTI AMC?State Bank of India, Life Insurance Corporation, Bank of Baroda and Punjab National Bank?are planning to opt for a second round of disinvestment in the company.

However, the extent of dilution and its timing has not been finalised as yet. After the dilution of their stakes in favour of TRP, the stakes of four state owned companies has come down to 18.5% from 25%.

Except for PNB, which sold its asset management operations to US-based Principal, all the three major shareholders of the company are having their own mutual fund companies.

ICICI Securities is the sole advisor to TRP?s strategic acquisition of UTI AMC.

SK Dubey, general manager, Punjab National Bank, told FE, ?Further dilution in UTI AMC is an issue depending on some of the important factors, including mutual consent among the individual investors. The issue is to be jointly decided by all the stakeholders,? said Dubey.

An official of Bank of Baroda said that even if the bank plans to go for it, it will be purely based on the commercial decision. Talking about the stake, the official said, ?The TRP will bring its brand to the UTI AMC which will obviously increase its valuation whenever it goes to the IPO. Consequently, it will provide us good returns.??

UTI AMC is looking at the possibility of going public for quite sometime and now it is waiting for the right timing for the same.UK Sinha, chairman and managing director of UTI AMC, said, ?We had planned for IPO way back in 2007-08. But then the global slump happened and we had to defer our plan and ended with finding a strategic partner in TRP.?

?Right now the company has no plans to go for IPO. However, in case my shareholders decide about it, then I will have to go for it,? he said.

UTI AMC has been been valued at over Rs 2,500 crore and TRP paid Rs 650 crore in total to the four share holders for picking up 26%. Officials from the UTI AMC also stated that already a team from the TRP is helping the company in managing the risk management and soon some changes will be done accordingly.

This article was first uploaded on January twenty-one, twenty ten, at forty-seven minutes past ten in the night.