Rating agency Crisil has assigned a 4/5 grade for the proposed initial public offering (IPO) of UTI Asset Management Company (UTI AMC). The grade indicates that the fundamentals of the issue are above average relative to other listed equity securities.A release from Crisil said UTI AMC has a high proportion of retail and equity assets under management (AUM) when compared with other players by virtue of its strong retail distribution channel and brand recognition. The retail base helps the company better manage the churn of assets while higher proportion of equity provides higher recurring management fees when compared with debt funds.The grading reflects Crisil's expectation that the management will be able to harness these strengths to mobilise assets and register growth to substitute the expected decline in income from the Specified Undertaking of Unit Trust of India (SUUTI).Crisil also expects that UTI AMC will be able to effectively compete with universal service providers like the ICICI Group, the HDFC Group and the Reliance (ADAG) Group.
