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Two agencies to assess NAV of UTI-II

New Delhi, Dec. 12 (PTI): The government has appointed two independent agencies for assessing the net asset value (NAV) of UTI-II, which would be transferred to a company jointly promoted by Life Insurance Corporation of India (LIC), State Bank of India, Punjab National Bank and Bank of Baroda.

“The LIC-led consortium has to pay an amount when the government transfers UTI-II to the new asset management company (AMC). We have appointed two independent agencies for assessing the value of the NAV-based UTI-II,” finance ministry sources said here today without naming the valuers.

The NAV-based schemes of Unit Trust of India, which would be clubbed under UTI-II, has a corpus of over Rs 17,000 crore.

According to global practice, acquirer of a mutual fund has to pay about 4 per cent of the corpus size to the promoter company.

Going by this global trend, UTI-II may be valued at over Rs 700 crore. The government is likely to attach a premium to UTI-II considering the investor base, brand names and portfolio mix, part from the value of assets.

Meanwhile, State Bank of India, Punjab National Bank and Bank of Baroda has obtained Reserve Bank’s permission for setting up an AMC to handle UTI-II.

Sebi has also granted permission to LIC and the three banks to set up an AMC, its chairman G. N. Bajpai confirmed.

The LIC-led consortium is also carrying out a due diligence exercise after which the government will transfer UTI-II to them.

The four partners would invest Rs 2.5 crore each in the AMC, which will start with an initial equity capital of Rs 10 crore.

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