UTI Asset Management IPO Review; Should you Invest?

UTI Asset Management Company (UTI AMC), is going to enter the equity market by Initial Public Offerings (IPO) which opened on Tuesday 29^th September 2020. The IPO will be available for subscription for three days.

UTI Asset Management Co. Profile

UTI AMC, incorporated in the year 2002. The services offered by the company are PMS and mutual funds to HNI and institutional clients. The company is running its business in Asset management services from the last 55 years with a proven track record.

There are 163 financial centers of UTI AMC all over the country, 273 BDA and chief agents. Within the four sponsors of the company (SBI, PNB, BOB, LIC) the Government of India has the majority shareholding.

The company manages a total of 178 mutual funds schemes as of 30^th September 2019.

UTI AMC IPO Details

IPO opening and closing date: Sep-29 to Oct-01, 2020
Issue size: 38,987,081 equity shares @Rs.10 each (aggregating up to Rs.2,159.88 cr)
Market lot: 27 shares
Face value: Rs.10 per equity share
Minimum order quantity: 27 shares
IPO Price: Rs.552-Rs. 554 per equity share
Listing At: BSE, NSE

Post issue the promoters share will reduce to 69.2% from 100%.

UTI AMC is going to use the net proceed from the initial public offerings (IPO) for the following purposes:

• To get the benefit of listing equity shares in the stock exchange.
• Sale of equity shares aggregating up to 38,987,081 by selling shareholders.

UTI AMC Financial Health; Should you invest?

The total revenue of UTI AMC remains steady in the last three financial years. The revenue was Rs. 1081 crore in the financial year 2019. In FY 2020, total revenue fell to 17.6% YOY. Again, in Q1FY21, the total revenue of the company increased by 11.4% YOY.
The market share of the company has declined has no performed well in the last few years. It may result in an adverse impact on the business also.

UTI AMC is a brand in the market and companies get the benefit from its brand name. The financials of the company is also not bad. Additionally, the company has granted ESOPs at Rs. 728/share and the price band of the issue are Rs.552-Rs.554.
It means, there is room to earn listing gain by investing in UTI AMC IPO.