UTI Asset Management Company (UTI AMC), expects to offload a 26% stake in the company within three months. UK Sinha, chairman and managing director of UTI AMC said on Saturday, ?We would complete the dilution in three months?.

This means the company?s board meeting next week would push the deadline for the decision after a new government takes over at the Centre after the general elections.

While its current four shareholders, LIC, SBI, PNB and BOB have been pushing for the divestment to recover their investment in the country?s third largest mutual fund, the process will take some more time. All the four control 25% each of the Rs 10-crore paid-up capital of the asset management firm. UTI AMC was created in 2003 in the wake of a stock market scam, with the government taking over the toxic assets of erstwhile UTI to create a special undertaking under its control, while UTI AMC was created to take over the net asset value based schemes as part of a restructuring of the mutual fund. The four sponsors paid Rs 1250 crore after a valuation exercise in 2005, to buy out the government?s stake in the fund house.

Sinha said an equal stake from each stakeholder would be taken out in the 26% divestment. ?The board has given us guidelines and criteria under which dilution will happen,? he said.

Sinha said the strategic partner UTI AMC would help the company in diversifying internationally. Schroders Plc, The Vanguard Group Inc and T Rowe Price Group Inc have recently tabled their indicative valuation bids for the stake sale, which apparently range between 5% and 7% of the total assets of more than Rs 48,000 crore managed by UTI AMC. ?Though we have offshore funds with five star ratings, the corpus of these funds are not very big because of the lack of marketing support in overseas markets. Compared to our funds, other AMCs have mobilised a bigger corpus through their offshore funds despite the fact that they have two star rating primarily because of their foreign partners marketing support. We would like a partner those who could help us in overseas activities,? he added.

The move to delay the process till a new government took over has also been endorsed by some of the independent directors on the board of the company. The independent directors include KC Mishra, director of National Insurance Academy, Pune, Anita Ramachandran, CEO of Cerebrus Consultants and Prithvi Haldea, managing director of Prime Database besides two representatives of the promoter institutions, SC Bhargava who is chairman of OTC Exchange of India, and P R Khanna, a chartered accountant.

The UTI AMC disinvestment would be tracked closely as it would be a rare blue chip company approaching the stock markets this year.

Analysts estimate the valuation of UTI AMC?s 26% stake at a range of Rs 900 to Rs 1000 crore based on its wide branch network and distribution strengths.

The company has already held talks with several fund houses in the past few months to estimate the price that it could command for the stake sale. On the proposed acquisition, Mr Sinha said that the fund house is open to acquisition at a right price. Meanwhile, UTI AMC has tied up with Coopers Wealth Creators and Tower Infotech to provid investment opportunity to the employees and business associates of Tower Infotech under UTI Retirement Benefit Pension Fund. The micro pension fund is aimed at providing social security cover to private and unorganised sectors.

UTI AMC has three subsidiaries. Of these UTI International has offices in London, Dubai and Bahrain. The Assets under Management (AUM) of UTI International Ltd stands at $ 615 million as on September 30, 2008, the company records show.

UTI Retirement Solutions Ltd was set up as a 100% subsidiary of UTI AMC on 14th December, 2007. It started its operations on 31 March 2008.

The subsidiary has been set up to carry out the operations as Pension Fund as directed by the Board of Trustees of the New Pension System Trust, set up under the Indian Trust Act, 1882, and to undertake wholesale asset management as prescribed by the Government or Pension Fund Regulatory and Development Authority.

It was initially appointed by PFRDA to manage Pension Funds of Government Employees. But on 13th March, 2009, the company has also received the letter of appointment for management of Pension Funds under the New Pension System for all citizens, other than government.Employees covered by the defined contribution pension scheme. The other subsidiary of the fund house is UTI Ventures.