UTI AMC is coming up with IPO of equity shares of 38,987,081amounting to Rs2160 crore. It is purely an offer for sale and the company will not receive anything from the proceeds. Offer of sale includes
The offer includes a reservation of 200,000 equity shares for purchase by eligible employees.
Fund QAAUM was 1,336.3 billion, while Other AUM was 8,493.9 billion.
UTI manages 153 domestic mutual fund schemes as on June30 2020, comprising
The topline and the bottomline both are showing a declining trend since FY19. Total revenues for FY20 has reduced by 17% to Rs 890 crore (FY 19 : Rs 1080 crore).This is due to the adverse effects of the pandemic wherein clients have withdrawn mutual funds due to volatile equity markets.There has also been some reduction in inflows and SIP Live Folios and the mutual fund industry has also experienced SIP stoppages.
Domestic Mutual Fund QAAUM has decreased by 11.8%, inthe three-month period ended June 30, 2020 compared to the fiscal year ended March 31, 2020. However, the operating and the net margins are robust at 43% and 24% respectively in FY20. Debt to equity is very low for the AMC.
|of which management fees||159.43||786.47||881.38||935.35|
|Cash flow from operating activities||15.14||194.72||122.71||268.56|
|Cash and cash equivalents||123.86||119.25||124.18||150.19|
|% of management fees to total rev||58.82%||88.27%||81.54%||80.44%|
The listed peers of UTI AMC are HDFC AMC and Nippon Life Asset Management Limited as per RHP. However, other players in the industry are ICICI Prudential, Axis mutual fund, Aditya Birla Sun Life Mutual Funds among many others. The P/E of UTI is 25.73 at the upper price band which is low as compared to the industry peer P/E average of 38.64.This signifies that the IPO is attractively priced. At NAV of Rs 217.88 in FY20, P/BV is 2.54. Considering the strong brand of UTI and being the one of the large AMC, the proposed issue has garnered huge interest among the investors; thus it might bring in listing gains and long term growth as well.
Review By CA Priyanka Choudhary on
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About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.