Aditya Birla Sun Life AMC IPO On Wednesday, the first day of the issue, there was 56 percent subscription. A day earlier, the asset manager had allotted shares worth Rs 789 crore to anchor investors at Rs 712 per share. Aditya Birla AMC is aiming to raise an initial public offering of over Rs 2,768 crore through this IPO. The IPO is an offer for outright sale, in which two promoters – Aditya Birla Capital and Sun Life (India) AMC Investments – will sell their stake in the asset management firm. The offer of 3.88 crore equity shares includes an offer for sale of 28.51 lakh equity shares by Aditya Birla Capital and 3.6 crore equity shares by Sun Life AMC.
Aditya Birla Sun Life AMC, the investment manager of Aditya Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and Sun Life Financial Inc. of Canada.
The price band of the IPO is Rs 695 to Rs 712 per share. In the upper band, the issue size will be Rs 2,768 crore and the valuation will be Rs 20,500 crore.
The IPO is a secondary share sale by outright promoters Aditya Birla Capital (ABCL) and Sun Life AMC. The domestic partner is selling 2.85 million shares – less than 1 per cent of its stake – to raise about Rs 203 crore.
The GMP of Aditya Birla Sun Life AMC as on 30 September was Rs 20. The GMP on September 29 was Rs 25. This means that the company’s shares are trading at a premium of Rs 20 in the unlisted market.
The company is the fourth largest fund house in the country and its average assets under management stood at Rs 2.93 lakh crore in the June quarter. At present, it manages 118 schemes. Since its inception in 1994, the fund house has established a geographically diverse pan-India distribution presence covering 284 locations spread across 27 states and six union territories. For the quarter ended June 2021, the average AUM of Aditya Birla AMC was Rs 2.84 trillion. It had reported a net profit of Rs 155 crore on a revenue of Rs 336 crore. The profit after tax of Aditya Birla AMC was Rs 5,262 in 2021, the revenue in 2020 was Rs 4,944 crore. Profits have grown exponentially from 2019 to 2020 and from 2020 to 2021. In 2019, the profit was Rs 4,467 crore.
Should you subscribe?
“In FY 2016-21, ABSL has witnessed a strong AUM CAGR of ~15 per cent growing from Rs. 1365 billion to Rs. 2693 Bn. Revenue and profit have grown at a CAGR of 7 per cent and 21 per cent, respectively, over the same period. The positive macro-economic factors and strong industry growth forecast of ~12 per cent CAGR in FY21-FY26E, provide a good opportunity for the company to grow. ABSL enjoys a strong parentage, solid brand image, a good distribution network and a consistently high ROE of over 30 percent. That’s why we recommend “subscribe for the long term”, said an analyst at Nirmal Bang Equity Research.
“AMC has achieved substantial growth in its individual investor MAUM and customer base, which includes both retail and HNI investors. It is the fifth largest player in terms of market share in individual MAUMs among the top 10 AMCs as of June 30, 2021, as per CRISIL report. Its individual investor MAAUM grew at a CAGR of 18.38 per cent from Rs 546.13 billion as on March 31, 2016 to Rs 1,269.82 billion as on March 31, 2021 and Rs 1,333.53 billion as of June 30, 2021. , its individual investor MAAUM mix increased from 39.95 per cent as on March 31, 2016 to 47.01 per cent as of June 30, 2021, which was the second largest increase by QAAUM among the five largest AMCs in India. In line with the leadership position in personal investing,” said an analyst at Retail Research.