The long-pending initial public offer of UTI Mutual Fund may become a reality soon as indicated by its US-based shareholder T Rowe Price.

T Rowe Price withdrew its plea in the Bombay High Court against four domestic shareholders State Bank of India, LIC, Punjab National Bank and Bank of Baroda saying that its concerns on UTI AMC offer and board composition have been settled.

T Rowe Price, which holds 26 per cent stake in the company, had gone to the court as it wanted the domestic shareholders holding 18.5 per cent to pare down stake to 10 per cent through an IPO as per market regulator Sebi’s cross-holding norms as Indian shareholders held stake in other mutual funds as well.

Domestic shareholders were of the view that Sebi’s new cross-holding norms should not make a distinction between domestic and foreign shareholders.

 In a representation to Sebi and the Department of Investment and Public Asset Management, SBI and LIC had said that T Rowe Price should be directed to bring down its stake in the company. T Row Price too has interests in the mutual fund business in the US.
But Sebi has clarified that norms apply only to domestic firms that have conflicting business interests in India and hence T Rowe Price need not bring down its stake in UTI AMC.

T Row Price also had been quite uneasy with representatives of the domestic shareholders on the UTI AMC board as it wanted Leo Puri who had just completed five-year tenure as UTI AMC’s managing director to continue to see the IPO through, but Puri was not provided an extension by the board and stepped down on August 13, 2018.

T Rowe Price also blamed the UTI AMC directors representing the four domestic shareholders of stifling the company’s growth to promote their own mutual fund subsidiaries. In its petition, T Rowe Price had claimed that SBI, LIC, PNB and BoB were trying to stall the company’s proposed IPO. The petition had also sought implementation of Sebi’s rules and regulations and to extend the term of Puri for another year to see the IPO through. According to T Rowe Price, the four PSUs, which together own 74 per cent in UTI AMC, were not in favour of granting Puri a second term.