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Sunday, September 23, 2007

UTI to go public

UTI Asset Management Company has finally received in-principle approval from the government and its board to go public. Shares will be listed by end of this financial year.

Four promoters, Life Insurance Corporation of India, Punjab National Bank, Bank of Baroda and State Bank of India will dilute equal holdings amounting to 49 percent in the company. They now hold 100 percent in it.

Early this year, the company had revealed plans to raise public money.

UK Sinha, Chairman & MD, UTI AMC said, “It is a combination of both offer for sale by the existing shareholders but the company is also raising some fresh money &the idea for the fresh money we are going for a massive brand expansion, we are going for a massive technology upgradation, these things require money.”

Sources say dilution of sponsors' stake will help them unlock value and gain from capital invested in 2005 when uti was restructured. It also plans to raise capital for its private equity funds, so, it's appointing merchant bankers. After the listing, it will grant stock options to its staff.

While the company will sell 49 percent to investors, it will retain its PSU status with sponsors controlling 51 percent. This will make it one of the select fund managers to manage the government's pension scheme and the national investment fund.

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