Tata Group to create new large asset manager; in final talks to acquire a majority stake in UTI AMC | Popgen Tech
Tata Group to create new large asset manager; in final talks to acquire a majority stake in UTI AMC
SBI AMC, ICICI Prudential AMC and HDFC AMC are the top three managers in India, according to data from Amfi.
Tata eyeing major stake in UTI AMC
Internal approvals for the deal are in place and the Tata Group has also secured a nod in principle from the other major investor in AMC – global investment management firm T Rowe Price Group – which has a 23 stake in -100 in it, according to officials in the knowledge of this.
Tata AMC’s ownership, on the other hand, is such that Tata Sons and Tata Investment Corporation hold 68 percent and 32 percent, respectively.
UTI AMC stock jumps!
UTI AMC, listed in October 2020, stock rose more than 12 percent on Monday after reports suggested Tata’s interest in it. As of Friday’s close, it had a market capitalization of Rs 9,791 crore. The Tata Group will have to pay around Rs 4,400 crore for a 45 percent ownership in the MF at the current market price and another Rs 2,500 crore for the mandatory open offer of 26 percent.
The assets under management (AUM) of UTI AMC as on September 30 were Rs 2.34 lakh crore or about 6 percent of the total AUM. Tata AMC, the 12th largest in terms of AUM, managed assets of Rs 91,284 crore as on 30 September.
PNB, LIC, SBI, BOB reduce stake in UTI AMC
It is worth mentioning here that public lender PNB had earlier this year shared its desire to monetize its non-core assets which includes the sale of its stake in UTI AMC. In October 2020, the bank had sold 3 percent stake in UTI AMC for around Rs 180 crore, reducing its stake to 15.22 percent.
Subsequently, LIC, SBI and BOB had reduced their stake in UTI AMC to less than 10 percent during the IPO in October 2020.