UTI AMC’s shares soar 10% on reports of Tata group eyeing majority stake

Shares of UTI Asset Management Company (AMC) jumped nearly 10 per cent on Monday amid reports that the Tata group was in final negotiations for acquiring a majority stake in India’s eight-biggest fund house from four state-owned financial entities: Punjab National Bank (PNB), Life Insurance Corporation of India (LIC), State Bank of India (SBI) and Bank of Baroda (BoB).

There were similar reports in August 2022 and UTI AMC had then denied having any knowledge of negotiations between the Tata group and UTI AMC’s key shareholders.

UTI AMC hasn’t clarified the report this time. Stock exchange NSE has sought the AMC’s response on the reports.

If the deal goes through and a merger happens between UTI AMC and Tata AMC, then the combined entity is likely to become the fourth-largest AMC in India. In the September quarter, UTI and Tata AMCs together had average assets under management (AUM) of Rs 3.2 trillion. UTI MF was then eighth in AUM rankings, with assets worth Rs 2.3 trillion. Tata MF was at 12th spot with an AUM of Rs 91,300 crore.

As of September 30, 2022, PNB was holding a 15.22 per cent stake in UTI AMC. LIC, SBI and BoB were holding 9.98 per cent each. US-based T Rowe Price had 22.97 per cent stake.