UTI AMC Sets Rs 552-554 Price Band For Next Week’s IPO
A man with an umbrella walks into the Unit Trust of India (UTI) tower in Mumbai, India. (Photographer: Adeel Halim/Bloomberg)

UTI AMC Sets Rs 552-554 Price Band For Next Week’s IPO

UTI Asset Management Co. has set a price band of Rs 552-554 apiece for its initial public offering, which is set to open for subscription next week as domestic shareholders look to pare stake in the mutual fund house to meet regulatory requirement.

The maiden issue, an offer-for-sale by existing investors, will open for subscription on Sept. 29 and close on Oct. 1, according to a red herring prospectus by the nation’s eighth-largest asset manager. The mutual fund house, which had Rs 1.34 lakh crore in assets under management as of June, will sell up to 3.89 crore shares having face value of Rs 10 apiece.

At the upper end of the price band, the shareholders will cumulatively receive a little over Rs 2,150 crore. Since this is an offer-for-sale, UTI AMC will not receive any of the proceeds from the IPO.

The selling shareholders include State Bank of India, Life Insurance Corporation of India, Bank of Baroda, Punjab National Bank, and T Rowe Price International. The offer-for-sale includes 1.04 crore shares each offered by SBI, LIC, and Bank of Baroda, and another 38.04 lakh each by Punjab National Bank and T Rowe Price International.

The number of shares on offer account for a little over 30% of the number of fully paid up equity shares of the company.

Kotak Investment Banking, Axis Capital, Citigroup Global Markets, DSP Merrill Lynch, ICICI Securities, JM Financial, SBI Capital Markets and KFin Technologies are book running lead managers to the issue.

The company had filed its preliminary prospectus in December last year after the Securities and Exchange Board of India directed its domestic shareholders to lower their stakes in UTI AMC below 10% to comply with crossholding rules for mutual funds. These rules were introduced in March 2018 to eliminate potential conflicts of interest. According to the rules, if a shareholder has more than 10% stake in a mutual fund, it can’t hold a similar stake in another asset management company.

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