T Rowe Price becomes biggest UTI shareholder with 26 per cent

With US asset management company T Rowe Price completing a 26-per cent stake acquisition in UTI, the restructuring of India's oldest and now fourth largest mutual fund company is almost complete.

The restructuring exercise began almost eight years back, when UTI failed to meet redemption obligations on some of its schemes.

T Rowe Price acquired the stake in UTI Asset Management Co Ltd for $142.4 million (Rs650 crore), translating into an enterprise value of over Rs2,500 crore or 3.2 per cent, of assets under management (Rs78,203 crore), UTI said in a statement.

Through the transaction, the four UTI sponsors - Life Insurance Corp, State Bank of India, Punjab National Bank and Bank of Baroda - sold 6.5 per cent each of their holding in favour of T Rowe Price, leaving the four-state-owned entities with 18.5 per cent each.

Directors representing Rowe Price have been inducted on the UTI AMC board.

While SBI said the realisation from the sale would be booked into its third-quarter results, due later this month, Bank of Baroda would factor the transaction in its fourth-quarter performance.