Exclusive: Banks, LIC appoint SBI Capital Markets as merchant banker for stake sale in UTI mutual fund, say sources

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Three state-owned banks and Life Insurance Corporation of India (LIC) have appointed SBI Capital Markets Ltd as a merchant banker for the stake sale in UTI Asset Management Company (AMC) and the stake sale process will be completed in the next three to six months, people aware of the development told Moneycontrol on June 15.

“We have appointed SBI Capital Markets. The process for the stake sale has started, and we expect it to be completed in three to six months,” the source cited above said.

Earlier today, the Economic Times reported that Punjab National Bank (PNB), Bank of Baroda, State Bank of India (SBI) and LIC are working to sell their stakes in the AMC. These entities together hold a 45.13 percent stake in the UTI mutual fund.

The shareholding pattern of UTI mutual fund as on March 31 shows that PNB has a 15.22 percent stake or 1.93 crore shares, and Bank of Baroda, SBI, and LIC hold 9.97 percent each.

Other stakeholders include Tata Mutual Fund, which holds 3.55 percent, PPFAS Mutual Fund (2.52 percent) and Mirae Asset Mutual Fund (2.07 percent).

As per the ET report citing officials, earlier, Tata Group was understood to be in talks to buy a majority stake in UTI AMC from the four public sector entities, but discussions fell through as a large investor in the AMC insisted that the other investors follow a formal bidding process to sell their stakes instead of using the nomination route.

Last year, Punjab National Bank got approval from the DIPAM, Ministry of Finance for divestment of the bank's entire or part stake in UTI Asset Management Company in single or multiple tranches.

At that time, the timeline for the stake sale was not decided.