The IPO from India's largest asset management company UTI AMC is ready to hit the street

UTI Asset Management Company (AMC) has received markets regulator Sebi's go ahead to raise a little over Rs 3,000 crore through its initial public offering (IPO). The IPO of the country's largest asset management company in terms of total assets under management (AUM) comprises sale of 3,89,87,081 equity shares by existing shareholders, according to the draft red herring prospectus (DRHP).

State Bank of India (SBI), Life Insurance Corporation (LIC) and Bank of Baroda are offering to sell 1,04,59,949 shares each, while Punjab National Bank (PNB) and T Rowe Price International are planning to offload 38,03,617 shares each.

The public offer is expected to raise a little over Rs 3,000 crore, market sources said.

UTI AMC, which had filed draft papers with Sebi in December 2019, obtained its observations on June 16, latest update with the markets watchdog showed.

Sebi's observations are necessary for any company to launch public issues including initial share-sale, follow-on public offer and rights issue.

SBI, LIC, Punjab National Bank and Bank of Baroda hold 18.5 per cent stake each in UTI AMC. The US-based T Rowe Price holds 26 per cent stake in the company.

Kotak Mahindra Capital, Axis Capital, CitiBank, DSP Merrill Lynch, ICICI Securities, JM Financial and SBI Capital Markets are the book running lead managers to the offer.

The shares of the company are proposed to be listed on BSE and NSE.

As of September 30, 2019, the company had the largest share of monthly average AUM.

In December 2019, Sebi had asked SBI, LIC and PNB to dilute their stakes to below 10 per cent in UTI AMC by December next year.

Under Sebi's mutual fund regulations, a shareholder or a sponsor owning at least 10 per cent stake in an AMC is not allowed to have 10 per cent or more stake in another mutual fund house operating in the country.

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