Country oldest fund house UTI Mutual Fund may revive its initial public offer (IPO) plan after Finance Ministry's nod which is expected soon.
"There is proposal for IPO of UTI Mutual Fund and the Finance Ministry is looking at it. The Ministry after consideration can give in-principle approval for public offer," sources said.
Government has stake in the UTI Mutual Fund through public sector banks and insurance companies. State Bank of India, Punjab National Bank, Bank of Baroda and LIC holding stake in UTI Mutual Fund on behalf of government of India.
State Bank of India, Punjab National Bank, Bank of Baroda and LIC jointly owns 74 per cent stake in the fund house while remaining 26 per cent stake is with the US-based investment firm T Rowe Price.
In 2008, UTI Asset Management Company deferred its IPO owning to uncertain market conditions. The fund house had proposed to sell 4.8 crore equity shares through IPO.
Subsequently in 2009 all the four sponsors of UTI diluted 6.5 per cent each in favour of T Rowe Price.
"The IPO would not be a revenue raising measure but it is governance measure," sources said, adding, IPO will make UTI AMC as market based mutual fund.
Listing of UTI AMC would strengthen corporate governance of the mutual fund and this development would result in other asset management company to go for listing, sources added.
The stake sale would also help in meeting minimum 25 per cent public float norm.
However, market regulator Sebi has not fixed any time limit for this.
During the first quarter of the current fiscal, UTI Mutual Fund average asset under management (AUM) was Rs 79,441 crore.
The country's 44 fund houses together had an average AUM of Rs 9.85 lakh crore during April-June quarter of 2014-15, up from Rs 9.05 lakh crore in the preceding three months.