The deal was struck at Rs 265 crore, where all the 3 crore equity shares of UTI Securities were bought at around Rs 88 per share. There were around 10 bidders in the fray with Bank of Baroda (BoB) at the second position. The new promoters will use the UTI brand for two more years and then will decide on the future course of action, sources close to the deal said.
STCI is a PD and wants to expand the operation by entering into investment banking and other activities through this buy out, sources said and added the new promoters of UTI Securities will absorb all the existing employees and there will be no lay off.
Shiv Bihari Mathur, administrator SUUTI confirmed the deal and said that the management control will be handed over as soon as the payments were made, subject to regulatory approvals. ICICI Securities acted as the advisor to the issue.
G Narayanan, managing director, STCI while confirming the deal said, "The ownership would, however, be effective from the month of March. UTI Securities would continue to function as an independent arm of STCI and as per the share purchase agreement, the brand name UTI would continue for the next two years."
STCI plans to foray into insurance and mutual fund product distribution, cater to the high networth individuals (HNIs) and also render portfolio management services (PMS) to the pension funds (PFs).