UTI AMC lists at 11.5% discount to issue price of Rs 554

NEW DELHI: UTI Asset Management Company (AMC) made a tepid debut on the bourses on Monday, as the stock got listed at Rs 490.25 on BSE, a 11.51 per cent discount to its issue price of Rs 554 per share.

With this, UTI became the third AMC to get listed on stock exchanges after Nippon Life India Asset Management (NAM) and HDFC AMC.

The Rs 2,160 crore issue, sold in the Rs 552-554 price band between September 29 to October 1, had received bids for shares 2.31 times of what was on offer, yet the subscription level was one of the lowest in recent times. Grey market demand for the unlisted shares was also tepid, as the HNI quota of the initial public offer (IPO) remained undersubscribed.

On NSE, the scrip got listed at Rs 500, down 9.75 per cent.

UTI AMC’s HNI portion saw 93 per cent subscription, while the quotes for QIB and retail portions were subscribed 3.3 times and 2.3 times, respectively. Overall, the issue had received bids for 6,31,02,348 shares against 2,73,50,957 on offer. Analysts tracking the unlisted shares of UTI AMC were expecting a Rs 5-11 per cent listing discount to the issue price.

UTI AMC manages mutual funds of UTI Mutual Fund and provides portfolio management services to institutional clients and HNIs. It also manages retirement funds, offshore funds and alternative investment funds.

The company has been active in the AMC industry for over 55 years. Nearly 92.3 per cent of total AUM is invested in UTI’s six core equity strategies, which have outperformed their respective benchmark indices (by an average of 1.3 per cent per annum) for an average return of 9.6 per cent per annum in 10-year period ended June 30, 2020.

At the issue price, the stock demanded a valuation of 25.4 times FY20 earnings, 5.25 per cent of June quarter's average assets under management and a Rs 7,024 crore market-cap. Listed peer HDFC AMC trades around 35 times FY20 earnings and Nippon AMC at 37 times.