Past fund to improve IPO flow in India while owners quit
In brief, some of the stakeholders came under managing pressure. As a result, they tried to cut their stakes. Therefore, India’s earliest mutual fund, UTI Asset Management, set to introduce in the coming year. Hence, this past fund to improve IPO flow in India as the shareholders made their way to exit.
On Dec 6, the Market regulator of India insisted Life Insurance Corp. (LIC), State Bank of India, and Bank of Baroda to lessen their stakes in UTI Asset by the end of 2020. Mutual funds to avoid potential conflicts of interest in the order stems from a cross-holding limit.
The deal value for the existing shares has plunged to a four-year low in the Indian IPO market. According to Bloomberg, this year, in India, the initial sales have increased to $2.7 billion with existing shares.
Also, State Bank of India and private-equity firm Carlyle Group planned to sell their shares in the lender’s credit card unit. So, this could increase more than $1 billion.
In most other Asian markets, the offering of the existing shares played a minor role. In IPOs, China virtually has no secondary shares. While this year, it has existing equity accounts for only 3% of Hong Kong‘s $37.5 billion deal value showed by Bloomberg.
In October, people who knew this matter said that UTI selected investment banks to organize a sale. Hence, it would increase to 26 billion rupees (@367 million). Last week, IFR Asia reported that the asset manager is looking forward to introducing the offering of about 40 billion rupees in the first quarter of 2020.