Stakeholders State Bank of India, Punjab National Bank and Bank of Baroda may opt for a full exit in this IPO process, according to sources.
UTI Mutual Fund will likely launch its IPO by March next year and the fund houseÂ will be ready to submit its Draft Red Herring Prospectus in the next three months, sources have told Moneycontrol.
State Bank of India, Punjab National Bank and Bank of Baroda may opt for a full exit in this IPO process. These three banks and LIC each have anÂ 18.3 percent stake in the company. All four have mutual fund subsidiaries, thus creating a conflict of interest.
According to SEBI regulations, a mutual fund sponsor cannot run two asset management companies. LIC is said to be in talks for mergingÂ LIC Mutual Fund with UTI.
"This is the right time to approach the primary market," said a source close to the development. "Perhaps this will be the first (domestic) mutual fund company to come out with an IPO and it will get a premium considering the first-mover advantage."
According to sources, UTI has appointed for ICICI Securities to help with IPO.Â UTI Mutual Fund manages more than Rs 1.5 lakh crore worth of assets.
"It is good for the whole industry," said Manoj Nagpal, Chief Executive Officer of Outlook Asia Capital. "Listing of an Asset Management Company increases the corporate governance standards. Others will also take the IPO route if all goes well with UTI Mutual Fund's listing."
Reliance Mutual Fund, a subsidiary of Reliance Capital, had also announced that it would come out with an IPO in this financial year.