India’s largest PSU lender State Bank of India’s board has approved stake sale in UTI AMC (Asset Management Company). SBI will sell 8.25% stake in UTI AMC IPO via OFS (Offer for sale). Currently, SBI holds about 18.25% stake in UTI AMC. The development comes after SEBI had introduced crossholding limits in mutual funds to eliminate potential conflicts of interest. According to SEBI rules if a shareholder has at least a 10% stake in a mutual fund, it cannot hold a similar-sized stake in another fund house and would also have to give up its board positions. UTI’s four domestic shareholders — LIC, State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB) — hold 18.5% stake each and also have their own AMCs.
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SBI said that it looks to sell up to 8.25% stake through IPO by way of offer for sale of up to 1,04,59,949 equity shares (the “Offered Shares”), subject to the approval of the Securities and Exchange Board of India (‘SEBI’), and/or such other concerned authorities and departments. UTI AMC IPO may hit the bourses before the end of current calendar year. Notably, UTI AMC is the 7th largest asset manager in the country, and would be the third AMC to be listed on the exchanges. Currently, only two AMCs, Reliance Nippon Life AMC and HDFC AMC, are listed on the exchanges.
UTI AMC was incorporated on November 14, 2002 and commenced operations from Feb-03. The firm has 150 branches and over 1 crore investor accounts. UTI AMC has four subsidiaries — UTI Venture Fund Management, UTI International, UTI Retirement Solutions and UTI Capital. The firm’s net worth as of March 31,2019 was Rs 2,408 crore, up from Rs 2,173 crore in the previous year. Profit after tax for the fiscal year came in at Rs 348 crore, as against Rs 341 crore in the previous year.
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Source: Financial Express