Angel Broking: UTI AMC IPO - Should You Subscribe?
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Angel Broking Report
UTI Asset Management Company Ltd., the second largest AMC in India in terms of total asset under management, is eighth largest in terms of quarterly average asset under management (Rs 1,33,600 crore) as of June 30, 2020.
In terms of live folios, UTI AMC accounts for 12.2% of the 89.7 million industry folios as of March 31, 2020.
Over the past five years (FY2015-2020), equity AUM for the Indian MF industry has increased 2.7 times from Rs 3.24 lakh crore to Rs 9 lakh crore.
Further, overall AUM has nearly jumped 2.4 times from Rs 11.48 lakh crore to Rs 27.14 lakh crore over the same period.
There is a huge growth potential for MF industry as the penetration of mutual funds is low in India with an AUM/gross domestic product ratio of 11% as of March 2020 versus that of developed countries at more than 50%.
Lower attraction in real estate by investors due to subdued returns coupled with lower inflation will direct investors from physical assets to financial savings, resulting in MF AUM to grow at a healthy rate.
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