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UTI Mutual Fund Revives IPO Plans, Seeks Government Nod

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Mumbai: Confident about a steady trend continuing in the Indian markets, UTI Mutual Fund has decided to go public and has sought approval of the government to launch an initial public offer (IPO).

"We are planning our IPO. We have made a request for approval to the Ministry of Finance. As soon as we obtain that, it should take around six months or so thereafter," UTI Asset Management Company managing director Leo Puri said.

Mr Puri, a dual Master's degree holder from Oxford and Cambridge University of the UK, said that the capital markets regulator Securities and Exchange Board of India (Sebi) has been very encouraging and helpful to the companies that want to go public and there should not be any difficulty or delay in the IPO.

"Sebi has been quite responsive and encouraging and it has been helping companies come to the market quicker. They are speeding up the approvals and fast-tracking the processes. They are trying to make sure that whatever they can do at their end to encourage companies to come to the market quickly, that gets done."

"So, I do not anticipate any difficulty post obtaining the approval from the Ministry of Finance," Mr Puri told PTI in an interview here.

UTI AMC, which runs the country's oldest fund house UTI MF, had earlier also planned to launch an IPO, but it had to shelve its plans way back in 2008 due to adverse market conditions, despite having got all regulatory clearances.

UTI MF had average assets under management (AUM) of close to $15 billion at the end of last quarter. It was carved out of the erstwhile Unit Trust of India (UTI) as a mutual fund in February 2003.

It is promoted by the four of the largest public sector financial institutions as sponsors - State Bank of India (SBI), Life Insurance Corporation (LIC), Bank of Baroda and Punjab National Bank (PNB). These four each hold 18.5 per cent stake in UTI Asset Management Company, while US-based fund house T Rowe Price has acquired a 26 per cent stake.

Mr Puri, who has been heading UTI AMC for about two years now, was earlier managing director at global private equity giant Warburg Pincus. He has also worked as director and senior advisor with McKinsey and Co.

Without disclosing further details about the planned IPO, Mr Puri said that the company's board has favoured the public offer and thereafter it has approached the Finance Ministry.

Asked whether the market conditions have become conducive, Mr Puri said Indian markets have been very steady and the impact has been relatively moderate here despite the kind of global volatility being witnessed elsewhere.

"Movements here have been relatively moderate, especially if we look at what we have been seeing, for example in China or even Europe for that matter. We have had a relatively modest amount of movements," he said.


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