Shares of UTI Asset Management Co. fell on its stock exchange debut after receiving a strong response in the primary market.
The stock began trading at Rs 490.25 -- an 11% discount to the issue price of Rs 554. UTI AMC debuted along with Mazagon Dock Shipbuilders Ltd., which listed at 49% premium to its issue price. The stock gave up further ground to close 14% lower at Rs 476.2 apiece.
UTI AMC's initial public offering, an offer-for-sale worth Rs 2,150 crore, was subscribed 2.3 times. The demand was led by institutional investors, with the portion reserved for qualified institutional buyers subscribing 3.33 times. Non-institutional investors bid 92% on the shares earmarked for them, while the portion for retail investors and employees subscribed 2.31 times and 1.34 times, respectively.
The company claims to be India's second-largest fund house by total assets under management, and eighth-largest by quarterly average AUM. In the quarter ended June 30, 2020, the company's average AUM for domestic mutual funds stood at Rs 1.34 lakh crore.
Besides, UTI AMC has other assets under management worth Rs 8.5 lakh crore, including portfolio management services to Employees' Provident Fund Organisation, Postal Life Insurance, National Skill Development Fund and advisory PMS to various domestic and offshore accounts.
The company's portfolio management services business handled AUM of Rs 6.97 lakh crore as on June 30, most of which was for EPFO, while the rest was in the form of retirement, alternative investment and offshore funds aggregating to Rs 1.52 lakh crore.
UTI AMC aims to sell more actively managed mutual fund schemes to improve profitability, Chief Executive Officer and Whole-Time Director Imtaiyazur Rahman had told BloombergQuint in an interview. The company also plans to aggressively expand presence in the top 30 cities, further aiding profitability. It is even working to address high operating costs, more than its two listed peers—HDFC Asset Management Co. Ltd. and Nippon Life India Asset Management Ltd.
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