UTI to complete Pre-IPO placement next month

UTI to complete Pre-IPO placement next month


New Delhi: UTI Mutual Fund is likely to offload 20% stake to “strategic partners" next month before it comes out with an initial public offer in early February.

“As much as 20% would go to strategic partners which would help UTI expand its core businesses," UTI chief marketing officer Jaideep Bhattacharya told PTI.

The pre-IPO placement, which is likely to be complete by the end of December, wherein no single investor would get more than 5%, he said.

About one crore share of Rs10 each would be divested through private placement to the strategic investors.

UTI MF, being the country’s oldest fund and having large network of offices, has generated much interest from many domestic and foreign financial service providers, he said, adding, the valuation is being carried out.

The strategic investors along with capital will bring in expertise so that the company can become one-stop shop for financial needs of every customers, he added.

Besides, the fund house would divest 29 per cent of its stake through offer for sale for which Draft Red Herring Prospectus would be filed with the regulator by December.

The issue is likely to hit market in early February, he said, adding, “we have appointed seven investment managers."

JM Financial, Enam Securities and Citi are the global coordinator-cum-book running lead manager (BRLM), while UBS, Goldman Sachs, ICICI Securities and SBI Capital along with CLSA will act as the lead book-running managers.

UTI would probably become the first listed fund house in Asia by 2007-08 end, he said.

All four sponsors — State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation — holding 25% each in UTI Mutual Fund have already agreed to divest 49% stake.

Besides private placement, the fund manager would divest 29% through the IPO.

Although valuation is yet to be finalized, reports suggests the fund house is likely to generate Rs5,000-6,000 crore from the stake sale.

The third largest fund manager, UTI Mutual Fund, which has asset of over Rs51,000 crore under management, recently launched three-year closed-end equity scheme ‘Infrastructure Advantage Fund-Series I’.

It expects to raise over Rs4,000 crore from the new fund offer (NFO). The last biggest NFO was ‘Leadership Fund’, which raised Rs2,100 crore.