UTI AMC IPO opens for subscription of September 29; check price band, issue size, other details

UTI Asset Management Company, one of India’s oldest AMC, is set to launch its initial public offering (IPO) next week at a price band of Rs 552-554 per share. The issue will be available for subscription from September 29 and will remain open till October 1. At the upper price band, this will translate to an issue size of Rs 2,160 crore. The IPO market has so far witnessed five public issues, all of which have been oversubscribed by all categories of investors. The listing of two of these — Happiest Minds and Route Mobile — have also been massive with stocks surging over 100% on listing.

UTI AMC’s issue will include an offer for sale (OFS) from existing shareholders like State Bank of India, Life Insurance Corporation, Bank of Baroda, Punjab National Bank, and TRP. The issue will not include a fresh issue of shares. Of these, 2 lakh shares will be reserved for the employees of the asset manager. UTI AMC will not be receiving any proceeds from the issue. The purpose of the issue will be selling of shares by existing shareholders, getting benefits of listing on the stock exchanges and to provide liquidity to existing shareholders. 

The issue will make up for 30.75% of the post-issue share capital. From the issue, the anchor book portion will be of Rs 648 crore. UTI AMC, one of the oldest AMCs in India, and has an asset under management (AUM) of Rs 9.71 lakh crore with 153 mutual fund schemes, 10.9 million live folios. With India’s Gross Financial Savings growing at a CAGR of 11.1% since the end of financial year 2013 till March 2019, UTI AMC’s management said that it is well capitalized to capture this growing trend. Mutual funds in India have been growing as an option for financial savings, closing the gap between bank deposits. 

Post the IPO, UTI AMC will join peers like HDFC Asset Management Company and Nippon Life India Asset Management Company that are already listed on the bourses. UTI AMC had a net profit of over Rs 300 crore in financial year 2020. The total financial assets of the company at the end of June this year stood at Rs 2,820 crore.