UTI Mutual Fund valued at about Rs 2,000 cr
UTI Mutual Fund has been valued at about Rs 2,000 crore and a new sponsor is expected to be short-listed by Sept.
UTI Mutual Fund has been valued at about Rs 2,000 crore and a new sponsor is expected to be short-listed by September.
"The entire process of finding a new sponsor is expected to be over within the next few months. The proceeds from the sale of UTI Mutual Fund will come to the government," a Finance Ministry official said.
SBI Capital Market, which was engaged by Finance Ministry to carry out the valuation, has given its report.
Sources said the fund house has been valued at about Rs 2,000 crore, which is over eight per cent of its assets under management of over Rs 22,000 crore.
According to industry experts, a mutual fund could be acquired at two-six per cent of its assets under management (AUM).
The valuation of UTI AMC is much higher as it has a strong brand image and huge network across the country.
UTI AMC has been one of the fastest growing funds in the country and targets an AUM of Rs 26,000 crore by the end of this fiscal, a growth of over 25 per cent.
The fund also has plans of expanding its branch network to 15 more cities this fiscal over and above the 56 cities they are already into.
UTI AMC plans to expand its branch network to 100 cities in the next two years.
The government appears to be in favour of selling UTI Mutual Fund to one of the four existing sponsors - Life Insurance Corporation, State Bank of India, Punjab National Bank and Bank of Baroda and it has sounded the four sponsors on the sale of UTI AMC. The highest bidder among them would be selected in a month or two.