Shares of UTI Asset Management Company zoomed over 16 percent in intraday trade on Monday, the most in nine months. The shares touched their day high at Rs 908 per piece.
Tata Group entered has entered the final stage of negotiations to buy a majority stake in the company from four public sector financial biggies. This led to the rise in UTI's share price today.
Sources privy to the matter have said that the Tata Group is in talks to buy a cumulative 45.16 percent stake held by four state-owned entities – Punjab National Bank, Life Insurance Corporation of India, State Bank of India, and Bank of Baroda – in UTI Asset Management Company.
Reports suggest that a final agreement underlining the valuation of the deal is currently being sought with Tata having received internal approvals from a significant shareholder of the mutual fund company, T Rowe Price Group, which holds around 23 percent.
UTI Asset Management Company is currently the eighth-largest mutual fund in India. If the Tata deal with UTI AMC concludes, the combined entity will become the fourth-largest asset manager in India.
On November 24, public sector lender Punjab National Bank announced that it received approval from the Finance Ministry to divest its entire stake in the UTI AMC through single or multiple tranches. The sale of the stake is intended to realise the gains of the investment by PNB.
Shares of UTI AMC ended nearly 10 percent higher at Rs 848 on Monday.
