IPO will depend on market sentiment: UTI

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New Delhi, Mar 5 (UNI) Country's second-largest mutual fund firm UTI Asset Management today said it will enter the capital market with its IPO only after gauging the market sentiments.

''We will bring out the IPO depending on the market sentiments and the response we get,'' said company Chief Marketing Officer Jaideep Bhattacharya.

UTI Asset Management had filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to enter the capital market with an expected 48,500,000 equity shares of Rs 10 each through an offer for sale by the selling shareholders for cash at a price to be decided through a 100 per cent book-building process.

The company joins a crowded Indian equity issuance queue.

India's booming economy has boosted incomes, and a buoyant stock market has drawn more household savings into the rapidly growing 140 billion dollar mutual fund industry.

State Bank of India, Bank of Baroda, Punjab National Bank and Life Insurance Corp of India-- all state-run -- hold 25 per cent each of UTI. After the IPO, in which 19.4 million shares will be sold by existing shareholders, their combined stake is expected to fall to 51 per cent.

After a successful run for last two years, stocks have witnessed a plunge over the last few weeks. Also, companies like Emaar MGF and Wockhardt had also withdrawn its IPO after a weak response from the market.

UTI's IPO will be closely watched by investors, given the scarcity of publicly traded asset management companies.

According to estimates, Indian companies are expected to raise 14.2 billion dollars in IPOs this year, topping a record 8.26 billion dollars raised in 2007.

Once listed, UTI mutual funds will be the country's first listed asset management company.


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