{"id":566,"date":"2020-09-24T13:41:18","date_gmt":"2020-09-24T13:41:18","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=566"},"modified":"2020-09-30T09:10:42","modified_gmt":"2020-09-30T09:10:42","slug":"uti-amc-ipo-oldest-player-in-amc-business-should-you-subscribe","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/uti-amc-ipo-oldest-player-in-amc-business-should-you-subscribe\/","title":{"rendered":"UTI AMC IPO: Oldest Player in AMC Business. Should you Subscribe?"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div>\n<p>There is no denying the fact that\npromoters of the unlisted companies have chosen September month to enjoy\nlisting gains as UTI AMC is the second most awaited IPO of this year after SBI\nCards and sixth IPO afterHappiest\nMinds, Route Mobile, Computer Age Management Services, Chemcon Speciality\nChemicals and Angel Broking Limited. The company has drafted the Red Harring\nProspectus (RHP) to raise Rs. 3,000 crore in the primary market. The issue is a\ncomplete Offer for Sale (OFS) in which State Bank of India, Bank of Baroda, and\nLIC will divest 8.25% stake each while T.Rowe Price International and Punjab\nNational Bank will sell 3% out of their total stake. The sole purpose of the\nobject is to achieve the benefits of listing.<\/p>\n\n\n\n<p>The object of the Offer for Sale is to allow the shareholders to sell an aggregate of up to 38,987,081 Equity Shares held by them of Face Value \u20b910 aggregating up to \u20b92156.00 Cr. at the upper price band of Rs. 554. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"counter-hierarchy counter-decimal ez-toc-grey\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\"><i class=\"ez-toc-glyphicon ez-toc-icon-toggle\"><\/i><\/a><\/span><\/div>\n<nav><ul class=\"ez-toc-list\"><li><a href=\"#UTI_AMC_IPO_Details\" title=\"UTI AMC IPO Details:\">UTI AMC IPO Details:<\/a><\/li><li><a href=\"#About_the_Company\" title=\"About the Company:\">About the Company:<\/a><\/li><li><a href=\"#Peer_Comparison\" title=\"Peer Comparison:\">Peer Comparison:<\/a><\/li><li><a href=\"#SWOC_Analysis\" title=\"SWOC Analysis:\">SWOC Analysis:<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><strong>UTI AMC IPO Details:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Issuer Company: UTI Asset Management Company<\/li><li>Industry: Financial Services<\/li><li>IPO Size: 2,152-2,156 cr.<\/li><li>Price Band: 552-554<\/li><li>Issue Open Date: 29 Sep, 20<\/li><li>Issue Close Date: 01 Oct, 20<\/li><li>Listing Date: 12 Oct, 20<\/li><li>Minimum Lot Size: 27 shares<\/li><li>Employee Discount: NA<\/li><li>Face Value: 10 RS. Per share<\/li><li>Retail Allocation: 35%<\/li><li>Listing Exchange: NSE, BSE<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About the Company:<\/strong><\/h2>\n\n\n\n<p>Unit Trust of India (UTI) Asset Management Company (AMC) is\nthe first asset management company in India with a history of more than 55\nyears. In order to reach PAN India, the company has established 163 UTI\nFinancial centers, 273 Business Development Associates and Chief Agents and 33\nother Official Points of Acceptance. The company has approximately 51,000\nIndependent Financial Advisors. &nbsp;UTIAMC\nis professionally managed company having four sponsors: State Bank of India,\nLife Insurance Corporation, Punjab National Bank and Bank of Baroda. The\ncompany is considered as a global asset management company having T. Rowe Price\nInternational Ltd in the list of major stakeholders which is controlling 26%\nstake in the Company. As per the data from CRISIL, UTI AMC is the largest AMC\nin India in terms of Total AUM, seventh-largest AMC in India in terms of mutual\nfund QAAUM with \u20b91,542.3 billion, and also has the largest share of monthly\naverage AUM amongst top ten Indian AMC coming from B30 cities. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Peer Comparison:<\/strong><\/h2>\n\n\n\n<p>In the unlisted space, the company has number of competitors such as SBI MF, ICICI Pru MF, HDFCAMC, NAM India, ABSL MF, Kotak AMC and Franklin Templeton MF etc. While in the listed space, the rookie AMC will face competition from HDFCAMC, NAM India, IDFC and Edelweiss Financial Services.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>SWOC Analysis:<\/strong><\/h2>\n\n\n\n<p><strong>Strength: <\/strong>UTI AMC has been the second -most awaited\nIPO after SBI Cards this year. The company has a strong reach in PAN India due\nto itsestablished 163 UTI Financial\ncenters, 273 Business Development Associates and Chief Agents and 33 other\nOfficial Points of Acceptance. The main strength of the company comes from its\nlong time history and reliability of the investors due to its promoters holding\nunder the Government of India. As per CRISIL, UTI is seventh-largest AMC in\nIndia in terms of mutual fund QAAUM with \u20b91,542.3 billion, and also has the\nlargest share of monthly average AUM amongst top ten Indian AMC. The company\nhas established distribution channels and managing marquee investors such as\nEmployees Provident Fund Organization, Coal Mines Provident Fund Organization,\nPostal Life Insurance, and Employees\u2019 State Insurance Corporation.<\/p>\n\n\n\n<p><strong>Weakness: <\/strong>The major weakness of the company is\northodox vision and products portfolio offered. Majority of the Asset under Management\nare invested in debt funds. While, Asset under Management in equity segment is\n32% much lower than the industry average of 39%. The management of assets in\nequity segment claims high expense ratio which in turn results in high\nmanagement fees and profitability but more banking upon debt instruments has restricted\ntheir revenues. The unavailability of private management system has also dampened\nthe structure of the company. Despite, the established distribution channel,\nthe company has failed to generate increments in AUM in last three years.<\/p>\n\n\n\n<p><strong>Opportunities<\/strong>: The mutual fund industry in India\nis highly less penetrated that there is huge opportunity of increase in\nbusiness in the upcoming years. Indian economy is known for following the\nfootprints of western countries and western countries are highly favored for\nmutual funds industry rather than channelizing funds in banks in the form of\nfixed deposits and recurring deposits. Moreover, the falling interest rates and\nrising salary structure of employees in public and private organization will\nresult in more funds channelization in mutual funds.<\/p>\n\n\n\n<p><strong>Challenges: <\/strong>There is no denying the fact that many public and private sector banks and foreign financial institutions have entered into the mutual funds industry in India. These companies have diversified offering for the investors. Moreover, their distribution channel structure and advertisement culture is very much unconventional which is expected to give a tough competition to the UTI AMC. After listing on the Indian bourses, the company will face competition from Nippon AMC and HDFC AMC.<\/p>\n\n\n\n<p>For more details, it would be recommendable to go through the red herring prospectus. You can also go through the\u00a0<a href=\"https:\/\/www.invest19.com\/ipo\/details.php?PageID=9\"><strong>UTI AMC IPO Details<\/strong><\/a>\u00a0to get deep insights into the company\u2019s performance, financials and expert advice. <\/p>\n<div class='epvc-post-count'><span class='epvc-eye'><\/span>  <span class=\"epvc-count\"> 3,525<\/span><\/div><div class=\"pld-like-dislike-wrap pld-template-1\">\n    <div class=\"pld-like-wrap  pld-common-wrap\">\n    <a href=\"javascript:void(0);\" class=\"pld-like-trigger pld-like-dislike-trigger \" title=\"\" data-post-id=\"566\" data-trigger-type=\"like\" data-restriction=\"ip\" data-ip-check=\"0\" data-user-check=\"1\">\n                        <i class=\"fas fa-thumbs-up\"><\/i>\n                    <\/a>\n    <span class=\"pld-like-count-wrap pld-count-wrap\">1    <\/span>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>There is no denying the fact that promoters of the unlisted companies have chosen September month to enjoy listing gains as UTI AMC is the [&hellip;] <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/www.invest19.com\/blog\/uti-amc-ipo-oldest-player-in-amc-business-should-you-subscribe\/\">Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":568,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[70,2],"tags":[],"class_list":["post-566","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo","category-stock-market"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/566","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=566"}],"version-history":[{"count":2,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/566\/revisions"}],"predecessor-version":[{"id":574,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/566\/revisions\/574"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/568"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=566"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=566"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=566"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}