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Markets volatile: UTI Mutual Fund defers IPO

July 07, 2008 17:52 IST

UTI Asset Management Company, country's first fund house that was planning to go public during this month, has deferred its initial public offering owning to uncertain market conditions.

The IPO has been deferred because of volatility in the stock markets, sources close to the development told PTI.

The BSE Sensex plunged by about 35 per cent in the last six months. The benchmark index which was over 20,000 level in January, is currently hovering around 13,000.

Pre-IPO placement that was intended to offload about 11 per cent of the post diluted shares has also been put on hold, sources said pointing out that the company would revisit its capital raising plan once the market condition improves.

In its draft red herring prospectus with regulator Securities and Exchange Board of India filed in January this year, the fund house proposed to sell 4.8 crore equity shares through IPO.

The process of the public offer started after all the four sponsors -- State Bank of India [Get Quote], Punjab National Bank [Get Quote], Bank of Baroda [Get Quote] and LIC-- holding 25 per cent each in UTI Mutual Fund agreed to divest 49 per cent stake.

About 1.2 crore shares were proposed to be offloaded through pre-IPO placements to strategic partners. The fund house proposed to use the IPO proceeds for its expansion plan.

Besides, the proceeds was intended to be utilised for technology upgradation and raising capital of its subsidiary UTI Venture, a venture capital arm of the fund house.

Country's third largest fund house had appointed seven investment managers to the issue, including JM Financial [Get Quote], Enam Securities and Citi as the global coordinator-cum-book running lead manager, while UBS, Goldman Sachs, ICICI [Get Quote]  Securities and SBI Capital along with CLSA, would act as the lead book-running managers.



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