The street’s enthusiasm for UTI Asset Management Co.’s initial public offering (IPO) could be mixed. IPOs are doing well with record subscriptions driven by high participation. However, the current market volatility has been a spoke in the wheel that could cause investors to focus on some of the imperfections in the company’s performance.
UTI’s average asset under management (AAUM) market share is a bit of a sore point. Its March 2014 AAUM market share stood at 8.2%. This has since shrunk to 5.4% in June 2020 among domestic mutual funds. The fund house saw a higher erosion in debt funds because of the turmoil in the debt market. As a result, the size of its income fund AUM contracted by about 60% since March 2018.
The general downtrend in equity AUM across the industry is also a concern. In August, there was a net withdrawal