MUMBAI, Nov 7: The UK-based Prudential Corporation is investing around Rs 51 crore to pick up 55 per cent in the ICICI Asset Management Company (I-AMC).

The institution has paid Industrial Credit & Investment Corporation a premium of around Rs 35 on a Rs 10 share to buy this stake. JP Morgan the erstwhile partner of ICICI in I-AMC was holding 40 per cent stake.

ICICI, which will hold 45 per cent stake in the AMC, will invest around Rs 8.36 crore crore, the term lending institution's chief executive officer and managing director KV Kamath said. I-AMC will now have a capital base of over Rs 20 crore. Earlier, it had a paid-up capital of Rs 8.33 crore and an investor base of three lakhs.

"Prudential is technically better equipped to handle an AMC. That is the primary reason behind offering it the majority stake," Kamath said.

Speaking to The Financial Express, Prudential Corporation's group chief executive Peter Davis said the company will announce its range of products for different categories of investors and maturities within two to three months.

``We will be targeting the domestic retail market,'' he said adding that the I-AMC will be different from other companies in terms of product choice. "The institution has received the Sebi's permission to invest in domestic equity market out of its three funds managed in UK, Davis said.

Prudential is of the view that Indian market -- both interms of investment and investor base -- has a tremendous potential.

I-AMC will be headed by a professional team. Prudential is in the look out for the chief executive from the open market.

Prudential which manages $180 billion worth of assets worldwide -- consisting of insurance and pension, mutual fund and investment business -- will bring in the best of technology and marketing skills to re-engineer the existing company. Prudential has also decided to channelise at least 30-40 per cent of $1 billion Asia Infrastructure Fund towards India. ``We are looking at power, telecom and port sector for our investment," Davis said.

JP Morgan sells 40% stake in I-AMC to ICICI

JP Morgan which has walked out of the asset management company has sold its entire 40 per cent holding to Industrial Credit & Investment Corporation of India on the basis of the predetermined formula agreed by both the parties.

JP Morgan will get a modest return on its investment in I-AMC. ICICI has evaluated the entire transaction by independent valuers and has received Reserve Bank of India's permission to repartitate the necessary amount.

The two schemes of the AMC -- ICICI Power and ICICI Premier -- are currently quoted under par and the company has recorded a loss Rs 86.46 lakh in the last fiscal against a profit of Rs 14.43 lakh during the previous year. The loss incurred by the company is attributed to lower management fees consequent to decline in net asset values of the respective schemes as also expenses incurred on brand building, said sources.

Though in view of recessionary market conditions, no new scheme was launched during the year, the company made efforts towards strengthening capabilities in the areas of research, portfolio construction, investor servicing and operations and systems management. ICICI Premier which was launched in November 1993 has a current NAV of Rs 7.66. It has a net asset of Rs 122.01 crore and will be redeemed in February 1999. The second scheme, ICICI Power, with a current net asset of Rs 73.58 crore was launched in September 1994 and would be redeemed in October 2002. It has a current NAV of Rs 8.15.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.