UTI AMC makes a tepid debut, lists at 11.5% discount to issue price

Shares of UTI Asset Management Company (UTI AMC) made a tepid debut at the bourses on Monday. The stock of the company listed at Rs 490.25 on the BSE, an 11.5 per cent discount to the issue price of Rs 554. On the National Stock Exchange (NSE), the stock's opening price stood at Rs 500, down 9.75 per cent against the issue price. 

At 10:30 AM, shares of UTI AMC were trading at Rs 522.45 apiece on the BSE. 

The Rs 2,160-crore initial public offer (IPO) of UTI Asset Management Company, which was opened for subscription from September 29 to October 1, was subscribed 2.3 times. The HNI portion of the IPO remained under-subscribed at 93 per cent.

UTI AMC is the second-largest asset management company in India in terms of total assets under management (AUM) and the eighth-largest asset management company in the country in terms of domestic mutual fund Quarterly Average Assets Under Management (QAAUM) as of June 30, 2020. UTI AMC has four sponsors, viz; SBI, LIC, PNB, and BOB. That apart, global asset management company, T. Rowe Price International Ltd, is also one of its major stakeholders holding a 26 per cent stake in the company.

"UTI AMC's FY20 return on equity (RoE) stands at 10.3 per cent which is much lower than its peers (HDFC AMC -35.5 per cent and Nippon Life -16.2 per cent). However, at the upper price band of Rs 554, UTI AMC is available at P/E of 25x FY20, which is cheaper compared to its peers (HDFC AMC-36x, Nippon Life - 38x)," analysts at Geojit Financial Services had said in an IPO note. 

The brokerage had recommended a "Subscribe" rating on the IPO on a short to the medium-term basis.