Mumbai: UTI Asset Management Company plans to sell 48.5 million shares through an initial public offering, the first by any asset management company in India.
The company will also make a fresh issue of 25 million shares, out of which 16 million will be privately placed with investors in a pre-IPO sale and 9 million issued as ESOPs to employees, said I. Rehman, CFO, UTI Mutual Fund.
Valuation
“There is no precedent, and this is the first time that such an issue is happening, that too under these market conditions,” he said.
Analysts noted that asset management companies are variously valued at 5 per cent to 10 per cent of their assets under management. In the case of Reliance AMC, in which international fund house Eton Park bought a 4.76 per cent stake, the valuation was at 12-13 per cent of the AMC’s AUM, said Sanjay Kothari, senior analyst, Unitis Tower Wealth Advisors.
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UTI AMC had filed its draft red herring prospectus with the SEBI. As on December 31, 2007, it had Rs 56,854 crore under management. At 10 per cent of this, its valuation would be Rs 5,000 crore, and a 49 per cent IPO sale could fetch up to Rs 2,500 crore.
UTI MF is equally owned by Life Insurance Corporation of India, State Bank of India, Punjab National Bank and Bank of Baroda. After the IPO, these companies will collectively hold a 51 per cent stake in the company.
The company will also make a fresh issue of 25 million shares, out of which 16 million will be privately placed with investors in a pre-IPO sale and 9 million issued as ESOPs to employees, said I. Rehman, CFO, UTI Mutual Fund.
Valuation
“There is no precedent, and this is the first time that such an issue is happening, that too under these market conditions,” he said.
Analysts noted that asset management companies are variously valued at 5 per cent to 10 per cent of their assets under management. In the case of Reliance AMC, in which international fund house Eton Park bought a 4.76 per cent stake, the valuation was at 12-13 per cent of the AMC’s AUM, said Sanjay Kothari, senior analyst, Unitis Tower Wealth Advisors.
• Check out our Yearender Special
UTI AMC had filed its draft red herring prospectus with the SEBI. As on December 31, 2007, it had Rs 56,854 crore under management. At 10 per cent of this, its valuation would be Rs 5,000 crore, and a 49 per cent IPO sale could fetch up to Rs 2,500 crore.
UTI MF is equally owned by Life Insurance Corporation of India, State Bank of India, Punjab National Bank and Bank of Baroda. After the IPO, these companies will collectively hold a 51 per cent stake in the company.
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