Abhishek Securities

  UTI AMC is the largest asset management company (‘AMC’) in India in terms of Total Assets Under Management (‘AUM’) and the seventh-largest AMC in India in terms of mutual fund Quarterly Average AUM (‘QAAUM’) as of September 30, 2019, according to CRISIL. The company caters to a diverse group of individual and institutional investors through a wide variety of funds and services. The company has been active in the asset management industry for the last fifty-five years and is the first established mutual fund in India. Now, the basic functioning of UTI AMC or for that matter any other AMC is to manage money. These companies act as an aggregator and invest the pooled funds from clients/ investors into a variety of securities and assets. AMCs range from personal money managers, handling high-net-worth individual accounts, to large investment companies sponsoring mutual funds. Their major source of income is the compensation in the form of fees, usually a percentage of AUM. Now, let’s...

  The initial public offering (IPO) of UTI AMC is slated to hit the markets this month. Sources in the industry said the fund house will launch its IPO on September 29. However, the price band of the issue is not known. The Securities and Exchange Board of India (Sebi) had given its approval for the IPO in June this year. The issue is likely to fetch shareholders around Rs 3,000-3,500 crore, claim market participants. Five shareholders of the UTI AMC will be selling nearly 3.89 crore shares through the IPO. The IPO will see the shareholding of three public sector undertaking (PSU) shareholders –  State Bank of India  ( SBI ), Life Insurance Corporation of India (LIC) and  Bank of Baroda  – go down to just below 10% each, while that of  Punjab National Bank  ( PNB ) will go down to 15.24%. Currently, SBI, LIC, BoB and PNB hold 18.24% each in the fund house. The shareholding of US investment firm T Rowe Price will go down to 23%, from the current 26%, af...

UTI Mutual Fund  (MF) has received the dues from  Zee Learn  (ZLL) after the fund house had side-pocketed the exposure to the Essel Group company last week. In an exchange note, ZLL disclosed that the balance amount was paid to UTI MF by  Zee Entertainment  Enter-prises (ZEEL) and that “they were in the process of acquiring the non-convertible debentures (NCDs) subject to necessary paperwork and legal approvals.” The fund house had decided to segregate its exposure to ZLL after CARE Ratings downgraded the NCDs to below investment grade on the likelihood of default on NCD payments on the maturity date of July 8. As of July 6, UTI Credit Risk had 9 per cent (Rs 40.77 crore) of its assets exposed to the Essel Group company. The medium-term fund had 3.02 per cent exposure (Rs 3.4 crore). CARE Ratings in its note observed according to the structure, ZLL was to pay the obligations related to NCDs at least 30 days before the due date, and in case of payment shortfall, ...