UTI Mutual Fund valued around Rs 1,500 cr

UTI Mutual Fund has been valued at around Rs 1,500 crore by SBI Capital Markets ""or slightly over seven per cent of the total assets of the fund, which are at Rs 20856 crore.

Incidentally, the valuation exercise is not complete yet and there chances that this initial valuation could be re-rated downwards.

Even though equity assets command a high premium in the asset management sector in India, the brand value of UTI is also factored into the valuation. Sources indicated that the initial valuation is high since it is not merely the assets which are on the block but the entire asset management company.

The government, it may be recalled, has devised the plan of allowing the four state-owned sponsors of the fund - State Bank of India, Life Insurance Corporation, Punjab National Bank and Bank of Baroda - to bid for the assets of UTI MF with the assets going to the highest bidder.

As of now, LIC is tipped to be the favourite, ahead of the others, solely because it is not associated with any foreign partner. Though SBI Mutual Fund has a larger asset base at Rs 6253 crore against LICMF's Rs 3325 crore, it may lose out since SocGen has a stake in the fund.