Unit Trust of India (UTI), the oldest and second largest mutual fund is going to be the first Asset Management Company (AMC) to introduce its first Initial Public offer in the market. For this UTI AMC has filed the Draft Red Herring Prospectus before Securities and Exchange Board of India, SEBI for getting approval from it.
From the official sources of UTI AMC, the company is going to strike the market with massive shares in the form of Initial Public Offering with 4.85 crore-equity shares having face value of Rs. 10 each, very soon, informed top official to media in Mumbai.
Four public sector banks and financial institutes comprising State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India will sponsor the IPO while Citigroup Global Markets India, Enam and JM Financial Consultants will arrange the share sale.
CLSA India, Goldman Sachs India , ICICI Securities, SBI Capital Markets and UBS Securities India will collectively manage the IPO. After launching mega-IPO, UTI will be India 's first AMC to be listed in the bourses.
As, per SEBI rules and regulations, UTI will also have to offer 1 percent of equity shares to its employee figuring into 4.85 lakh shares. If the shares will not occupied by UTI's employees, UTI will be free to offer it to the retailers.
Out of total net share, more than 50 percent of equities will be allocated on a proportionate basis to Qualified Institutional Buyers while 5% of them will be available to mutual funds on a proportionate basis.
In the remaining portion of released shares will be distributed between non-institutional bidders and retailers by the distributing proportion of 35 percent and 15 percent simultaneously.
From this IPO, UTI AMC is targeting to collect nearby Rs.20,000 crore, in which the part shares of UTI's promoters will also be included. UTI AMC will also make private placement to Qualified Institutional Bidders, Financial Institutions and Foreign Institutional Investors.
The Government of India has also asked UTI AMC to make available of 1.6 equity shares as a fresh issuance through the passage of a private placement to Qualified Institutional Investors, including existing shareholders, other Indian institutions and a FIIs.
UTI AMC is the second largest asset management company in India working since January 14, 2003 with total asset of worth Rs.568.5bn calculated on December 31,2007, while Reliance AMC, India 's largest Asset Management Company has the total assets of worth Rs.807.8 bn on the same day.
UTI is a heavyweight company in Mutual Funds working across the country with a widespread network of 79 UTI Financial Centres, independent financial advisors, banks and other distributors spreading in 455 districts out of 604 in India while it has also several offices and representatives in abroad.
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