UTI AMC Rallies 17%, Top Nifty 500 Gainer: Here’s Why

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UTI AMC Rallies 17%, Top Nifty 500 Gainer: Here’s Why

By Malvika Gurung

Investing.com -- Shares of the mutual fund company UTI Asset Management Company (NS: UTIA ) rallied 17.15% to Rs 903.55 apiece at the time of writing, after soaring nearly 18% to Rs 907 apiece on Monday and hitting a fresh four-month high.

The mid-cap stock skyrocketed on reports that the conglomerate giant Tata Group has entered the final stage of discussions to purchase a majority stake in UTI AMC from four public sector financial giants.

The four sponsors of the mutual fund company, State Bank of India (NS: SBI ), Life Insurance Corporation (NS: LIFI ) of India, Punjab National Bank (NS: PNBK ) and Bank of Baroda (NS: BOB ) collectively hold a 45.16% stake.

The Tata Group is reported to have entered the final negotiation stage for buying a majority stake in UTI AMC from the aforementioned four state-owned entities.

A final agreement on the valuation of the deal is being sought, as per sources with knowledge of the matter.

Further, officials have also stated that the Tata Group has received in-principle approval from the significant investor of UTI AMC, the global investment management company T Rowe Price Group. The latter owns almost a 23% stake in the company.

An ET report suggested that if the Tata deal goes through, the combined entity of Tata AMC and UTI AMC will become the fourth-largest asset management company in India, as UTI AMC is currently the eighth-largest mutual fund in the country.

UTI AMC is the top gainer on the broadest market index Nifty 500 .

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