UTI hopes to sell up to 26 pct stake by March

By Nishant Kumar

MUMBAI (Reuters) - UTI Asset Management, India's most profitable mutual fund firm, hopes to sell a stake of up to 26 percent by March as it seeks to access global markets and strengthen its domestic operations, a top executive said on Tuesday.

Chief Marketing Officer Jaideep Bhattacharya said UTI, which canned plans for an IPO last year, was in talks with four foreign firms and one domestic player and would "most probably" choose one of them for the stake sale.

He declined to name the firms, and said a decision on valuation would be taken by the end of January or early February.

Indian newspapers have named U.S. firm T. Rowe Price, Japan's Shinsei Bank and Vanguard Mutual Fund among those interested in UTI, which is India's oldest mutual fund.

"We are hopeful to close the deal by March," Bhattacharya told Reuters over telephone from the eastern city of Bhubaneshwar, where he was opening the firm's 100th branch.

Bhattacharya said UTI was interested in a partner that could give it access to the international market, and was also looking to add 50 more branches by March.

State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corp of India, all state-run, own 25 percent each of the UTI Asset Management. Media reports have said all would sell down their stakes equally.

Last July, UTI Asset Management pulled plans for a $480 million initial public offer of a 49 percent stake due to falling stock markets.