Global giants eye 26% in UTI Asset Management Company

The AMC is understood to have shortlisted four international players. Among the names under consideration are the US firm T Rowe Price, Shinsei Bank of Japan and two European firms, according to a person familiar with the negotiations. According to plans approved by the finance ministry, the four sponsors of UTI AMC — State Bank of India, Life Insurance Corporation of India, Bank of Baroda and Punjab National Bank, will offload part of their holdings to the strategic partner. The four state-owned entities currently hold 25% each in the asset management company. UTI AMC’s CMD, UK Sinha, was not available for comment. The plan to induct a strategic partner was announced a few months ago by the then finance minister P Chidambaram , while addressing the AMC board at its Mumbai headquarters. Despite the global financial market turmoil, the prospect of a stake in UTI AMC has evoked interest from leading international players due to its firm foothold in the Indian mutual fund industry. Though it has slipped from its numero uno position, UTI AMC is still the most profitable fund house. It posted a Rs 147-crore net profit in the previous fiscal. According to industry analysts , the firm could command decent valuations because of its profitability, high equity component in the assets it manages and a strong pan-India presence. UTI AMC managed Rs 38,358 crore as on November 30, 2008 and is the country’s third largest fund house. Due to its huge retail presence, the fund house has not faced a crisis in recent months, when most players were reeling under redemption pressure in debt schemes. It is among the few AMCs that did not have to borrow from banks to meet redemptions . Despite poor market conditions , the AMC managed to garner over Rs 300 crore in its recently-launched UTI Wealth Builder scheme.