New Delhi: UTI Mutual Fund, India's oldest fund house, may revive its initial public offering (IPO) plan after Finance Ministry approval expected soon.
"There is proposal for IPO of UTI Mutual Fund and the Finance Ministry is looking at it. The Ministry after consideration can give in-principle approval for public offer," sources said.
Government has stake in the UTI Mutual Fund through public sector banks and insurance companies. State Bank of India, Punjab National Bank, Bank of Baroda and LIC hold stake in UTI Mutual Fund on behalf of the government.
State Bank of India, Punjab National Bank, Bank of Baroda and LIC jointly own a 74 per cent stake in the fund house while the remaining 26 per cent stake is with T Rowe Price, a US-based investment firm.
In 2008, UTI Asset Management Company deferred its IPO owning to uncertain market conditions. The fund house had proposed to sell 4.8 crore equity shares through IPO.
Subsequently, in 2009, all the four sponsors of UTI diluted 6.5 per cent each in favour of T Rowe Price.
"The IPO would not be a revenue raising measure but it is governance measure," sources said.
Listing of UTI AMC would strengthen corporate governance of the mutual fund and this development would result in other asset management company to go for listing, they added.
The stake sale would also help in meeting minimum 25 per cent public float norm.
However, the Securities and Exchange Board of India (Sebi) has not fixed any time limit for this.
During the first quarter of the current fiscal year, UTI Mutual Fund average assets under management (AUM) were Rs. 79,441 crore.
The country's 44 fund houses together had average AUM of Rs. 9.85 lakh crore during April-June quarter of 2014-15, up from Rs. 9.05 lakh crore in the preceding three months.
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Updated Date: Aug 19, 2014 07:53:28 IST