India’s oldest Mutual fund house, UTI Asset Management company(AMC), there shareholders have decided to reduce their holding due to a regulatory requirement to general public through offer of sale. The complete process is expected to be completed in a period of next six months by March of 2020.
The regulatory SEBI (Securities and exchange board of India) has come up with a new crossholding rules in March’2018
Crossholding Rules: In case a shareholder holds 10% or more shares in a Mutual fund, then it cannot hold share of similar size in another mutual fund.
Shareholders of UTI: Presently UPI AMC has four major shareholders which includes Life Insurance corporation of India (LIC) -18.50%, State Bank of India (SBI) – 18.50%, Bank of Baroda (BOB) – 18.50% and Punjab National Bank(PNB) – 18.50% while Balance share is held by fifth player and US giant T Rowe Price holding balance 26% Share. All the 4 domestic players also held their own Asset management companies too, hence the Crossholding rules applies to all these four.
IPO of the same is likely to be launched by Feb-Mar’20
For implementation of guidelines also the Articles of company needs to be altered.
UTI presently have over 10 million investors along with 150 branches with Average assets under management (AUM) of ₹ 1.50 Lakh Crore.
This will be the third AMC IPO to get listed after HDFC AMC and Reliance Nippon Life AMC, both have already hit on bourses.