Shaky market scares away UTI mutual fund, IPO deferred

MUMBAI, July 7 : UTI Asset Management has put off plans for a $480 million share sale after falling stocks hit sentiment, joining about 10 other firms that have pulled or deferred offerings this year, six sources with direct knowledge of the matter said.

UTI, India’s No. 4 mutual fund manager, could not count on a strong investor response after the stock market slumped 23 per cent in the past seven weeks, the longest stretch of weekly losses in seven years.

“We were just not comfortable after the slide in the secondary market in the last fortnight. The pace at which it fell dented our confidence totally,” said a banker who did not want to be identified because he was not authorised to speak to the media. UTI, which manages $12 billion, had aimed to sell 49 per cent through the sale by its founders and a fresh issue of shares in a price band of Rs 270-320 each. The sale was slated for launch in mid-July, with private placement of new shares set to happen before that, said the sources, including bankers involved in the deal. The IPO had faced a July 22 regulatory deadline. A UTI spokesman declined comment.

ICICI Securities, a unit of No. 2 lender ICICI Bank, JSW Energy and Vedanta Energy are among firms that had delayed IPO plans worth a combined $4.1 billion this year amid poor markets, according to Thomson Reuters data.

That figure excludes $10-billion listing considered by the Government for Bharat Sanchar Nigam Ltd. The plan was shelved amid political opposition. The Sensex fell about 8 per cent in the last two weeks, rattled by rising interest rates and record Oil prices.

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