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    UTI AMC jumps 9% as Tata in final talks to buy majority stake

    Synopsis

    The report added that internal approvals are in and Tata has received an in-principle nod from the other big investor in the AMC - global investment management firm T Rowe Price Group, which holds around 23% stake.

    UTI AMC jumps 9% as Tata in final talks to buy majority stakeET CONTRIBUTORS
    Shares of UTI Asset Management Company (AMC) jumped nearly 9% to Rs 839.5 in Monday’s intraday trade on BSE as the Tata Group is reportedly in final negotiations to buy a majority stake in India's eighth-biggest mutual fund from four state-owned financial entities.

    Life Insurance Corporation of India (LIC), State Bank of India (SBI) and Bank of Baroda (BOB) together own a 45.16% stake in UTI AMC. A final agreement is being sought on the deal valuation, ET reported.

    The report added that internal approvals are in and Tata has received an in-principle nod from the other big investor in the AMC - global investment management firm T Rowe Price Group, which holds around 23% stake.

    ET had first reported Tata's interest in acquiring UTI AMC in August this year. If the deal goes through and Tata AMC and UTI AMC are merged, the combined entity will be the fourth-largest asset management company in India.

    At 10.44 am, the scrip was trading 6.6% higher at Rs 822.25 over its previous day’s closing price of Rs 771.15 apiece. The stock has surged about 35% in the last six months, while it has plunged around 24% year-to-date.

    UTI AMC, listed in October 2020, commanded a market capitalisation of Rs 9,791 crore on Friday. At the current market price, the Tata Group will have to pay about Rs 4,400 crore to buy a 45% stake in the UTI AMC and another Rs 2,500 crore for the 26% mandatory open offer.

    UTI AMC's assets under management (AUM) on September 30 amounted to Rs 2.34 lakh crore or about 6% of the total AUM. Tata AMC, the 12th biggest in terms of AUM, managed assets of Rs 91,284 crore on September 30.

    UTI AMC has sponsors such as LIC, PNB, SBI and BOB. T Rowe Price Group held a 22.97% stake on September 30 through T Rowe Price International. The company has no promoters.

    It posted a net profit of Rs 534 crore on revenue of Rs 1,319 crore in FY22. Tata AMC reported revenue of Rs 342 crore and a net profit of Rs 103 crore in FY22.

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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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