UTI Asset Management Company, the country's first fund house which was planning to go public during this month, has deferred its initial public offering owing to uncertain market conditions.
The IPO has been deferred because of volatility in the stock markets, sources close to the development said. The BSE sensex plunged by about 35% in the last six months. The benchmark index which was over 20,000 levels in January is currently hovering around 13,000. Pre-initial public offer placement that was intended to offload about 11% 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 Sebi 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, Punjab National Bank, Bank of Baroda and LIC — holding 25% each in UTI Mutual Fund agreed to divest 49% 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, Enam Securities and Citi as the global coordinator-cum-book running lead manager (BRLM), while UBS, Goldman Sachs, ICICI Securities and SBI Capital along with CLSA would act as the lead book-running managers.
