Shares of UTI Asset Management (AMC) hit a more than four-month high of Rs 890.30, surging 15% on the BSE in intraday trade on Monday on reports that Tata Group was in talks to buy a majority stake in the company. A company whose equity comes from a public sector enterprise (PSU) financial entity. The stock has been trading at its highest level since August 18, 2022.

UTI AMC was trading 13% higher at Rs 873.35 at 12:51 pm, while the S&P BSE Sensex gained 0.38%. The average OTC volume on the NSE and BSE multiplied several times, with 3.2 million shares changing hands.

Shares of UTI AMC have jumped 30% in the past month after state-owned Punjab National Bank (PNB) announced plans to divest its stake in the asset manager. In contrast, the S&P BSE Sensex edged up 0.02% over the period.

“The bank has received approval from the Government of India, DIPAM, to divest all/part of the bank’s shareholding in UTI AMC in tranches or batches subject to compliance with Sebi regulations/other applicable regulatory guidelines,” PNB said in a stock exchange filing a November 24.

UTI AMC is driven by four PSU sponsors who own 45.16% of the shares. Bank of Baroda, State Bank of India and Life Insurance Company of India each hold 9.98%, while PNB has 15.22%. US-based T. Rowe Price International owns another 22.97%, according to shareholding pattern data.

Over the past year, however, shares of UTI AMC have underperformed the market, falling 15% against an 8% gain in the S&P BSE Sensex. It hit an all-time high of Rs 1,217 on August 31, 2021. UTI AMC made its stock market debut on October 12, 2020. The company raised Rs 2,160 crore through a share issue at Rs 554 each.

Industry growth is expected to be driven by an overall pick-up in corporate earnings, higher disposable and investable household surpluses, rising total household income, a higher share of financial savings, deeper regional penetration, and consciousness. Increasing ease of investment through technological innovation and reach due to higher internet coverage; positive perception building through the “Mutual Fund Sahi Hai” campaign, among others, UTI AMC said in its FY22 annual report.