UTI AMC To Make Pre-IPO Placement To International Investors
UTI Asset Management, India’s second largest mutual fund group, is looking to bring in an international investor in the firm in a pe-IPO deal. The usual suspects Goldman Sachs, Lehman Brothers, Warburg Pincus, Singapore’s sovereign wealth fund GIC and a new investor like Japan’s Shinsei Bank are believed to be in the race for picking up 10-12 per cent stake in the company for about $200 million, according to a report in The Economic Times.
Such a transaction would peg the value of the firm at more than $2 billion. The deal is being seen as a move for UTI AMC to expand its footprint internationally. UTI AMC had recently filed DRHP with market regulator SEBI for its proposed IPO for 48.5 million equity shares. The firm is also making a fresh issue of 25 million shares, out of which 16 million shares will be part of the private placement and the rest would be issued as ESOPs to its to employees.
The firm is looking to raise about Rs 2,000 crore or $500 million through the IPO which would involve partial sale of shares held by its four PSU promoters SBI, LIC, PNB and Bank of Baroda who hold 25 per cent stake each. As of December’07, UTI AMC had assets under management of close to Rs 57,000 crore or about $14.25 billion, second only to Reliance ADAG’s asset management firm.
Incidentally, in December’07 hedge fund Eton Park Capital Management had picked 4.76 per cent in Reliance’s mutual fund business for Rs 501 crore valuing it at Rs 10,521 crore. In contrast, the UTI AMC pre IPO deal would value the firm at anywhere above Rs 8,000 crore.
