SBI-PNB-LIC want to sell stake in UTI, desperate to buy TataImage Credit source: Unsplash
Four major government financial institutions of the country-Punjab National Bank, Life Insurance Corporation of India, State Bank of India and Bank of Baroda are now calculating to sell their stake in UTI Asset Management Company. All of them together hold a major stake in UTI, one of the country’s largest asset companies, and the Tata group is keen to increase its stake in the company during this stake sale offer.
Punjab National Bank has the highest share in UTI among government financial institutions. This is equal to 15.22 percent. While each of the remaining three institutions has a stake of 9.97 percent. In this way, it is equal to about 45 percent stake of UTI. Apart from this, the money of private institutions like Tata Mutual Fund, ICICI Prudential Mutual Fund, Max Life Insurance Company is also invested in UTI.
Merchant banker appointed for stake sale
ET has reported quoting top officials aware of the matter that the four government institutions can officially invite bids to sell their stake in the company. To start this process, all of them have recently appointed merchant bankers.
Tata group first wanted to buy direct stake
Earlier Tata Group was in direct talks with these four government entities to buy a majority stake in UTI. But later this could not materialise, as a major shareholder of UTI urged other investors to bid as well. For this, these four institutions have decided to follow the bidding route instead of nomination to sell stake in UTI.
The government had given independence in September itself.
In September last year, the Department of Investment and Public Asset Management (DIPAM) had given more autonomy to government companies and financial institutions to decide on their other investments. Detailed guidelines were issued for this. However, so far no response has been given by UTI, PNB, LIC, Bank of Baroda, SBI and Tata Group regarding the stake sale.