UTI AMC to make Pre-IPO placement to international investors

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Indian mutual fund group, UTI Asset Management, is looking to bring in an international investor in the firm in a pre-IPO deal. The companies like Goldman Sachs, Lehman Brothers, Warburg Pincus, Singapore's sovereign wealth fund GIC and Shinsei Bank are in the race for picking up 10-12 percent stake in the company for about $200 million, reported the Economic Times The transaction would peg the value of the firm at more than $2 billion. The deal is being seen as a move for UTI AMC to expand its footprint internationally. UTI AMC had recently filed DRHP with market regulator Securities and Exchange Board of India (SEBI) for its proposed IPO for 48.5 million equity shares. It is also making a fresh issue of 25 million shares, out of which 16 million shares will be part of the private placement and the rest would be issued as ESOPs to its to employees. UTI is looking to raise about $500 million through the IPO which would involve partial sale of shares held by its four PSU promoters SBI, LIC, PNB and Bank of Baroda who hold 25 percent stake each. As of December'07, UTI AMC had assets under management of close to $14.25 billion, second only to Reliance ADAG's asset management firm. In December 2007 hedge fund Eton Park Capital Management had picked 4.76 percent in Reliance's mutual fund business for Rs 501 crore valuing it at Rs 10,521 crore. In contrast, the UTI AMC pre IPO deal would value the firm at anywhere above Rs 8,000 crore.

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