Mumbai, Nov. 9: T. Rowe Price Group Inc, the US-based fund house, today acquired a 26 per cent stake in UTI Asset Management Company (UTIAMC) for around Rs 650 crore.
The purchase came after four stakeholders of the country’s oldest asset management company — State Bank of India (SBI), Life Insurance Corporation, Bank of Baroda (BoB) and Punjab National Bank (PNB) — sold a part of their shareholding. These four stakeholders sold 6.5 per cent each to T. Rowe Price. They held 25 per cent of UTIAMC each.
The transaction values the fund house at Rs 2,500 crore or a little over 3 per cent of its assets under management.
The deal comes at a time when the domestic stock markets have rallied sharply with the financial system awash with funds and robust expectations that the economy is on its way to recovery. While this has seen the domestic mutual fund industry recovering from one of its worst crisis in 2008, the sector recently saw L&T Finance Ltd acquiring 100 per cent of DBS Cholamandalam Asset Management Ltd for a consideration of Rs 45 crore.
Moreover, data released by the Association of Mutual Funds in India recently showed that the combined average AUM of the 36 fund houses hit a historic Rs 7,62,301.82-crore mark at the end of October.
Last year, Infrastructure Development Finance Company acquired Standard Chartered Bank’s asset management business in India for $205 million.
Later, Religare bought Lotus India AMC, a joint venture between Fullerton Fund Management Group and London-based Sabre Capital Worldwide, for over Rs 100 crore.
In a statement issued to the stock exchanges today, PNB said it sold a 6.5 per cent stake to T. Rowe Price Global Investment Services. As part of this sale, it sold 81,25,000 shares of the company at Rs 200 each aggregating Rs 162.50 crore. PNB also sold 6500 shares of UTI Trustee at Rs 11.92 per share for Rs 77,500.
BoB also said it has sold a 6.5 per cent stake in the asset management company. The nationalised bank, however, did not disclose details of the transaction.
The deal is expected to benefit UTI Mutual Fund as it can use the T. Rowe Price reach to sell its products in the overseas markets.
While T. Rowe Price had assets of $336 billion as of September 30, UTI Mutual Fund had Rs 76,850 crore in assets under management as of October 31.
