UTI Mutual Fund is on course to go public with an initial share sale in the second half of the next year with a valuation of over $1 billion and is also looking at inorganic growth to reclaim the prime position it had enjoyed before the US 64 scheme went bust in early 2001. As and when the IPO happens, UTI will be first fund house to be listed in the country.
The IPO will allow partial exit for the nation’s oldest fund house’s four sponsors SBI, lIC, BoB and PNB which own 18.5 per cent each in it, while the remaining 26 per cent is held by US-based investment firm T Rowe Price.
“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,” UTI Managing Director leo Puri told PTI in an interview.
UTI MF was created after Parliament passed the Unit Trust of India (Transfer of Undertaking & Repeal) Act in 2002 after the flagship US 64 scheme went belly up. Post the Act, the then mighty UTI was bifurcated into Specified Undertaking of Unit Trust of India (Suuti), which owns almost 11.8 per cent in Axis Bank and UTI Asset Management Company.
The Baltimore-based T Rowe Price picked up 26 per cent in UTI in November 2009 by buying 6.5 per cent stake each from the four promoters for $140 million. “We are yet to go in for valuation as it will be discovered by the market. But we are sure of our valuation topping $1 billion. But the exact valuation will be determined as we go to the market for price discovery,” he said, adding the issue size will depend on our shareholders. Asked whether the company has sought the Government permission, Puri answered in the affirmative saying, “It has been pending with the Government for a long now. But now I hope that it would be coming anytime now.”
From its hallowed position of No 1 fund house for decades following the US 64 crisis, UTI has now fallen to a distant sixth slot. As of end-November, its overseas AUM stood at Rs 26,000 crore. By average AUM, UTI is the sixth largest with an average AUM of Rs 1,29,888 crore in September 2016. Asked whether UTI, which manages Rs 3 trillion assets including its global fund, has come out of the US 64 crisis, Puri said.