T Rowe Price acquires 26% stake in UTI

Four Indian institutions will receive about $140m for their combined stakes in UTI Asset Management, which is currently marketing a $500m infrastructure fund established in partnership with HSH Nordbank and Noor Financial Investment Company.

US-based global investment management firm T Rowe Price will take a 26 percent stake in UTI Asset Management, one of India’s largest asset management companies and parent of India-focused private equity firm UTI Ventures.

The deal, when completed, will be worth about INR6.5 billion ($140 million; €93 million), based upon the price at which one institution, Punjab National Bank, will divest its shares, according to a regulatory filing with the Bombay Stock Exchange.

T Rowe Price will build its position by acquiring stakes of 6.5 percent each from the Bank of Baroda, the Life Insurance Corporation of India, Punjab National Bank and the State Bank of India. Each of these institutions held stakes of 25 percent in UTI Asset Management and its affiliate UTI Trustee Company; their respective stakes will be diluted to 18.5 percent following the completion of the transaction, which is subject to statutory and regulatory approvals.

UTI Asset Management is currently marketing a private equity infrastructure fund, while its private equity subsidiary, UTI Ventures, is raising up to $400 million for its third India-focused fund.

The infrastructure fund is targeting $500 million, and has been established in partnership with HSH Nordbank of Germany and Kuwait’s Noor Financial Investment Company. The three sponsors have together committed about $75 million to the fund which will make investments in unlisted companies in the road, port, power, logistics, airport and energy sectors.