UTI Asset Management Company, the oldest fund house in the country, will rope in a strategic partner with 26 per cent stake.

While the government has given the go ahead for the move, the company is in the process of getting shareholder approval, UTI AMC Chairman and Managing Director U K Sinha told Business Standard in an interview.

The four shareholders – State Bank of India, Life Insurance Corporation, Punjab National Bank and Bank of Baroda – will offload 6.5 per cent each to a foreign partner, which is expected to be finalised by July-end, Sinha said. The four public sector players hold 25 per cent each in the company.

“Unlike the earlier plan, there is no capital that is coming to us, but it will all go to shareholders. Their stake will go down proportionately to 18.5 per cent,” he said.

While Sinha did not disclose the bidders, sources in the company said that three players were in the race to acquire a stake in the company’s oldest mutual fund.

UTI AMC was set up in 2003 after the government decided to separate the Unit Trust of India. The assured return and non-net asset value schemes were transferred to the Specified Undertaking of UTI, while the rest were transferred to UTI AMC, where the four public sector players acquired equity.

According to the original plan, which did not fructify, UTI AMC was looking for a private placement, which would have expanded its capital base, followed by an initial public offer, where the four shareholders would have reduced their stake.

A part of the capital raised was proposed to be utilised for acquisition and some funds were proposed to be allocated for strengthening UTI Ventures. But some of the shareholders, such as SBI, were against the move.

Besides, with valuations also falling, the plan was abandoned. The plans have been revived during the current financial year with at least three players – T Rowe Price, Vanguard and Schroders – said to be in the race to acquire stake.

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