UTI: Major Player in Underpenetrated Mutual Fund Market in India

Kimi Venkataraman and Sidd Thomas of India Intrinsic Value Consultants presented their investment thesis on UTI Asset Management Company (India: UTIAMC) at Asian Investing Summit 2025.

Thesis summary:

UTI Asset Management is one of India’s oldest and most respected names in investment management, with roots tracing back to its establishment by an act of Parliament in 1965. Today, the firm remains a top-ten player in the Indian asset management industry, with approximately $23 billion in assets under management and a 5.2% market share. Despite its legacy status and broad distribution footprint — 190 branches covering over 99% of Indian pin codes — UTI remains underappreciated in a market where mutual fund penetration is still in its infancy, with AUM-to-GDP sitting at just 15% compared to 140% in the U.S.

The company has a diversified business across mutual funds, pension mandates, and portfolio management services (PMS), with the latter accounting for 64% of AUM. Mutual fund assets, though smaller in absolute terms, benefit from a retail-heavy and largely direct distribution model, supported by a network of 55,000+ independent financial advisors. The company’s strong institutional backing — from State Bank of India, LIC, and two other public sector banks — gives it credibility and reach, particularly in India’s growing Tier 2 and Tier 3 cities.

UTI shares recently traded at ₹980, a P/E multiple of just 16x FY25 and a return on equity of 20%. In comparison, peers like HDFC AMC and Nippon Life command valuations of 27–32x earnings with ROEs in the 29–34% range. While UTI’s growth has been more modest — 5% annual revenue growth and 15% EPS CAGR over the last five years — the valuation discount appears excessive given the firm’s franchise value, brand recognition, and improving profitability metrics. The structural drivers of long-term AUM growth in India remain firmly in place, with the country still vastly underpenetrated by global standards.

Risks include potential market share erosion to more aggressive private sector competitors and sensitivity to short-term equity market sentiment. Nonetheless, UTI offers a compelling combination of heritage, scalability, and financial discipline, trading at a material discount to peers. With improving margins, strong distribution, and a tailwind from the formalization of savings in India, UTI represents a classic value opportunity in a structurally expanding industry.

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About the instructor:

Krishnaraj (Kimi) Venkataraman serves as a Director of Intrinsic Value Consultants Pte. Ltd., Singapore. He ran multiple investing partnerships in India delivering market beating returns consistently. Kimi started his career with Tata Steel and later Procter & Gamble, turned into an entrepreneur and ran several businesses. The last one, Marketics, was successfully sold to WNS. Kimi has been an investor for more than 30 years. In 2001 he stumbled upon the letters of Warren Buffett and nothing else was needed. Kimi is glad that Mr Buffett does not charge a royalty on returns made from his teachings.

Siddharth (Sidd) Thomas serves as a Partner of India Intrinsic Value Consultants. He founded Beaconsfield Investment Management in 2010. Prior to that he worked as an analyst covering Asian equities at Fairfax Financial Holdings and as an associate analyst at Credit Suisse equity research. Born and raised in Chennai, India, Siddharth completed his bachelor’s of science degree from Purdue University.

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