The Hindu Business Line : UTI MF seeks strategic partner

Looking out
To assess partners on skill to help core business, expertise, reach.
After IPO call-off, the company is waiting for things to stabilise.

Our Bureau

Mumbai, Aug. 29 UTI Mutual Fund is seeking a strategic partner, Mr P. Chidambaram, told reporters on Friday, after a meeting with UTI officials in Mumbai.

The fund house had lined up an initial public offering of shares earlier this year, but had to shelve its plans as the equity markets took a turn for the worse. It had got SEBI’s approval this April but three months later had relinquished the IPO plans.

The first mutual fund in India to moot such a step, it had planned to offload 38.8 per cent or 48.5 million of outstanding shares of the company. The asset marketing company had also planned a pre-IPO private placement of 16 million shares.

Such a placement is generally made to a financial entity. However, the current thinking appears to be in favour of a strategic partner for the fund house.

After the IPO was called off, the thinking within the organisation is now to wait for a variety of things to stabilise, said Mr U.K. Sinha, Chairman and Managing Director, of UTI Mutual Fund.

“Our fund house is looking for a strategic partner, although the IPO plan still stands. We will proceed with it only once the market turns favourable, said Mr Jaideep Bhattacharya, Chief Marketing Officer, UTI Mutual Fund.

Skill, access

“We will look at appropriate partners depending on their skill to help us in our core business of mutual funds and for their expertise in products, distribution and access to different geographies, he added.

UTI Asset Management Company has four sponsors namely State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India, each holding 25 per cent stake in the asset marketing company.

In 2003, the erstwhile Unit Trust of India was birfurcated into UTI Mutual Fund and the Specified Undertaking of UTI (which does not come under mutual fund regulations); the schemes of the latter are being wound up.