This week is full of new IPO offerings and UTI AMC IPO is one of them. It is a leading AMC (Asset Management Company) in India. It is the second-largest asset management company in India. In this article, we will analyze the details of the UTI AMC IPO and check whether you should subscribe to the IPO or not?
In this article we will check the below points
- What is this company is doing?
- What is the shareholding pattern of the company?
- How are the financials of the company?
- What is the valuation of the company?
- How are industry growth and future opportunities?
- What are the strength and weaknesses of the company?
For applying in an IPO it is best if you apply through an online broker using UPI or ASBA option.
UTI AMC Company Details
The company was incorporated on 14th November 2002 at Mumbai. It is a professional managed company hence there is no identifiable promoter of the company.
As we have mentioned above it is the second-largest AMC in India managing the AUM (Asset Under Management) ₹ 970600 crores of funds. It is also the 8th largest mutual fund AUM management company with an AUM of ₹. 133600 crores.
It is managing 10.9 million folios which is 12.2% of the total mutual fund industry’s AUM.
The company is catering to the domestic mutual funds in India. Dealing with all types of mutual fund schemes like equity, debt, balance, hybrid, and so on. The company also offers PMS (Portfolio Management Service) to the HNI clients and individuals in India.
It also manages pension fund and offshore funds. The company is having a strong distribution channel with 163 financial centres across India. The company also has 257 business development associates. There are around 53000 independent financial advisors are attached to the company selling different schemes of the UTI AMC.
The company also sells mutual funds via banks and financial institutions. It also has a dedicated sales team for individuals and PSU circles. It has its own website and mobile app through which the mutual fund schemes are being sold.
UTI AMC has 459 relationship managers across India to cater the needs of the customers at various locations. The company also has international offices in London, Dubai, Singapore.
Management fees are their main revenue source which is contributing to around 73% of the total revenues for the company.
So these are the main details about the company now let’s have a look at the shareholding pattern of the company.
UTI AMC’s Promoters and Shareholding pattern
| Shareholders | No. of Shares | % of Shareholding |
| SBI | 2.31 Crs. | 18.24% |
| LIC | 2.31 Crs. | 18.24% |
| BOB | 2.31 Crs. | 18.24% |
| PNB | 2.31 Crs. | 18.24% |
| TRP (T. Rowe Price) | 3.29 Crs. | 26.00% |
| Others (Employees) | 0.13 Crs. | 01.04% |
UTI AMC’s Financials
| Particulars | 2020 | 2019 | 2018 |
| Total Revenues | 8549.69 | 10505.08 | 11500.52 |
| Revenue Growth | -18.61% | -8.66% | – |
| Net Profit (PAT) | 2730.30 | 3528.31 | 3642.05 |
| Return on Net Worth(RoNW) | 9.88% | 13.55% | 15.35% |
As you can see from the above table of the revenues, there is a decreasing trend in revenue. The revenue has decreased in the years 2019 and 2020 as well. The same trend is seen in the net profit where the profit is also in the decreasing trend for the last 3 years.
Return on net worth is also on the decreasing trend from 15.35% in year 2018 to 9.88% in year 2020. This clearly shows that the financials are not that strong.
While checking the reason for decreasing revenue I could find only one major reason which is the reduction in TER (total expense ratio) by SEBI. This has impacted almost all the AMCs in India. SEBI has imposed the upper limits on the TER of the mutual fund schemes hence the revenue of the company is seen decreasing.
Price to Book Value 2.54
(Industry P/B 11.12)
Company PE 25.73
(Industry PE 35.17)
Looking at the price to book value of the industry, UTI AMC is fairly valued. Same way if we look at the PE ratio of the company, it is at below industry PE which is a good sign also.
UTI AMC IPO Details
Some of the details of the UTI AMC is as below.
- 2nd largest AMC in India in terms of total AUM and 7th largest in terms of mutual fund AUM
- The main revenue source is management fees which are comprised of 72.7% of the total revenue of the company.
- UTI AMC is the first company to launch a mutual fund in India and has more than 55 years of experience.
- Managing 11 million folios which are 12.2% of the total mutual fund industry.
- The company has 459 relationship managers across India.
- As of 30th September 2019, the UTI AMC is managing 178 domestic mutual fund schemes.
IPO Details:
| IPO Date | Sep 29, 2020 – Oct 1, 2020 |
| Issue Type | Book Built Issue IPO |
| Issue Size | 38,987,081 Eq Shares of ₹10 (aggregating up to ₹2,159.88 Cr) |
| Face Value | ₹10 per equity share |
| IPO Price | ₹552 to ₹554 per equity share |
| Market Lot | 27 Shares |
| Min Order Quantity | 27 Shares |
| Listing At | BSE, NSE |
| Bid/Offer Opens On | Sep 29, 2020 |
| Bid/Offer Closes On | Oct 1, 2020 |
| Finalization of Basis of Allotment | Oct 7, 2020 |
| Initiation of Refunds | Oct 8, 2020 |
| Credit of Shares to Demat Acct | Oct 9, 2020 |
| IPO Shares Listing Date | Oct 12, 2020 |
UTI AMC IPO FAQs
UTI AMC IPO is a main-board IPO of 3.89 crores equity shares of the face value of ₹10 aggregating up to ₹2,159.88 Crores. The issue is priced at ₹552 to ₹554 per equity share. The minimum order quantity is 27 Shares.
The IPO opens on Sep 29, 2020, and closes on Oct 1, 2020.
KFintech Private Limited is the registrar for the IPO. The shares are proposed to be listed on BSE, NSE.
The bidding date will open on 29th September 2020 and closes on 1st October 2020.
The lot size of the IPO is 27 shares per lot.
The listing date is still not declared, but the tentative date would be 12th October 2020.
You can apply for this IPO via ASBA and UPI mode through your broker like Zerodha, Upstox, 5 paisa etc. Alternatively, you can apply for this IPO via banks using UPI mode.
Yes, definitely you should invest in this IPO. Looking at the company’s financial there is no doubt that you should not invest into this IPO.
Company Contact Information
UTI Asset Management Company Ltd
UTI Tower, ‘Gn’ Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai 400051, Maharashtra, India
Phone: +91 22 6678 6666
Email: cs@uti.co.in
Website: https://www.utimf.com/