The Initial Public Offering (IPO) of UTI Asset Management Company, the country's third largest fund house, is likely to get delayed till next year as the company has to apply afresh to SEBI.

Besides, the fund house intends to tap the capital market only at a time when it feels that market conditions are favourable for an IPO.

"The license we had for the IPO, has lapsed. We have to apply fresh...we will wait till the market conditions improve, both, domestically and internationally, prior to entering the capital market," UTI MF Chairman and Managing Director U K Sinha said, after a meeting with Union Finance Minister P Chidambaram, in Mumbai on Friday.

The company would rather prefer to induct a strategic investor to raise funds and enhance its competency in the domestic mutual funds industry, he said.

UTI MF had filed its draft red herring prospectus (DRHP) with SEBI in January this year to sell around 4.8 crore equity shares.

Now, following its decision to defer the IPO, the company has also put on hold its pre-IPO placement plans through which it was planning to off-load 11 per cent to strategic investors.

The Government is now considering the induction of a strategic investor into UTI MF without diluting the majority stake of its for sponsors - State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India.

The induction of a strategic partner is aimed at bringing world-class skills and expertise into the company, Sinha said, adding that this would make UTI MF more competent in the Indian mutual funds industry.

However, the company is yet to identify the partner, Sinha said.

According to indications available, the fund house promoted by state-owned entities, is likely to partner an Indian firm.

Chidambaram, after his meeting with UTI MF officials, said that the Government was looking for strategic investors for UTI MF without diluting the majority stake of the existing partners.

"UTI MF is doing well...but a little shackled...they want to compete with other players in the market...We are looking for some strategic investors to be brought into UTI MF without diluting the majority stake of the three banks and LIC," Chidambaram said.

UTI MF had plans to expend the IPO proceedings to fuel its expansion plans which included enhancing its technology platform.