UTI Mutual Fund may become the first listed AMC

India’s leading fund manager UTI Mutual Fund, managing assets of Rs.40000 crore is likely to come out with its IPO by end of FY08.

The sponsors of UTI Mutual Fund include the top 3 public sector banks, State Bank of India, Punjab National Bank and Bank of Baroda while the fourth is insurance giant Life Insurance Corporation of India, each holding 25% stake.

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India. However in February 2003, UTI was bifurcated into two separate entities. One was the Specified Undertaking of the Unit Trust of India comprising assets of US 64 scheme, assured return and certain other schemes while the second was UTI Mutual Fund Ltd.

However inspite of being the oldest Mutual Fund player, it has recently been shifted to the third spot in Assets Under Management rankings, with Reliance Mutual Fund and ICICI Prudential Mutual Fund sharing first and second spot respectively.

Since all the four sponsors of UTI MF have there own separate AMC, it was imperative for them to sell their stake. Since equity markets are booming, the fund may also receive good valuations from the primary market.