As more IPO waves are reaching to the shores of Dalal Street, it’s time for UTI AMC to try luck with the investors, who have passionately participated in recent IPOs launched. Taking inspiration from other companies which have hit a home run with their IPO launch, UTI AMC prepares to float its proposal next week. It comes at a moment when the market is seeing a revival with renewed investors’ interest in initial public offerings.
UTI AMC IPO, preparing to go live during the week of September 14, will target the market for Rs 3000 crore with the selling of 38,987,081 equity shares.
UTI AMC is India’s largest asset management company in terms of total AUM (Asset Under Management) valuation. It has companies like Employee Provident Fund Organisation, National Skills Development Fund, Postal Life Insurance, and many more as its key clients. Initially a public undertaking, UTI AMC came to being in 2002. The company renders its services in segments of portfolio management and asset management to institutional and high net worth clients. In terms of business volume, it has 11 million live portfolios accounting 12.8 percent client base in the mutual fund segment and presence across the nation. As in September 2019, UTI AMC was managing 178 domestic mutual fund schemes in a variety of equity, hybrid, liquid, income and money market funds. 72.7 percent of the firm’s earning comes from asset management fees for its domestic mutual funds.
UTI AMC IPO listing is significant for its shareholders as well, who are SBI, LIC, and Bank of Baroda. In December 2019, SEBI instructed the stakeholders to reduce their holding size in the company by December 2020. Failing to which SEBI might freeze their excess voting rights. According to SEBI norms for mutual funds, investors in one company can’t hold more than 10 percent in another AMC. SBI, LIC, and Bank of Baroda each own 18.24 percent in UTI AMC. SEBI has already imposed a fine of Rs 10 lakh on each lender for failing to reduce their stake size in the firm.
The shareholders have agreed to offload their shares in phases. Initially, 25percent shares will be issued in pro-rata basis under the IPO scheme, and later 10.92 percent divestment will take place in a follow-on public offer. This will bring down the share size of the three primary lenders by 8.25 percent. At the same time, T Rowe Price and Punjab National Bank have agreed to offload 3 percent each. T Rowe Price is the majority stakeholder with 26 percent, followed by PNB with 18.24 percent.
In July, the mutual fund portfolios saw a massive net outflow when investors tried to cash out after the slump in March. According to facts provided by the Association of Mutual Funds in India, there was a net outflow of Rs 2,480.35 crores in the said month.
The IPO decision of the asset management company comes at a time when the market is showing signs of revival. Several other companies are in line to float their IPO offers in the months to come. Seeing the fact that Happiest Minds IPOs subscribed for 35 times, one can safely assume there is a huge demand for good IPO offers in the market.
UTI AMC IPO news is undoubtedly big for the investors. The details regarding the scheme like IPO date, price band, and more will be announced soon.
Initial public offerings are a good choice for investors looking at long-term performance. If you want to subscribe for UTI AMC IPO, you can do it by login into your Angel broking console.