Aditya Birla Sun Life AMC IPO witnessed a moderate response from the investors. The issue was subscribed 56 per cent on Wednesday, the first day of the subscription. A day earlier, the asset manager had allotted shares worth Rs 789 crore to anchor investors at Rs 712 apiece. Aditya Birla AMC, through this IPO, is targeting to raise over Rs 2,768-crore initial public offering. The Aditya Birla Sun Life AMC IPO is entirely an offer for sale, that will see two promoters — Aditya Birla Capital and Sun Life (India) AMC Investments — divesting their stake in the asset management firm. The offering of up to 3.88 crore equity shares comprises an offer for sale of up to 28.51 lakh equity shares by Aditya Birla Capital and up to 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 the Sun Life Financial Inc of Canada.
The price band for the Aditya Birla Sun Life AMC IPO is Rs 695 to Rs 712 per share. At the upper band, the issue size would be Rs 2,768 crore and valuation works out to Rs 20,500 crore. The domestic partner is selling 2.85 million shares – less than 1 per cent of its stake – to raise about 203 crore.
The GMP of Adity Birla Sun Life AMC IPO was Rs 20 on September 30. This means that the shares of the company are trading at the premium of Rs 20 in the unlisted market.
Should You Subscribe?
“Over FY16-21, ABSL has witnessed strong AUM CAGR of ~15 per cent rising from Rs. 1365 billion to Rs. 2693 Bn. Revenues and profits have grown at a CAGR of 7 per cent and 21 per cent respectively over the same period. Positive macro-economic factors and a robust industry growth prediction of ~12 per cent CAGR over FY21-FY26E, provide the company with a good opportunity to further grow. ABSL enjoys a strong parentage, solid brand image, a decent distribution network and consistently high ROE of over 30 per cent. We thus recommend to “subscribe for the long term,” an analyst from Nirmal Bang Equity Research said.
“The AMC has achieved substantial growth in its individual investor MAAUM and customer base, which comprises both retail and HNI investors. It is the fifth largest player in terms of market share in individual MAAUM among the top 10 AMCs as of June 30, 2021, according to the CRISIL Report. Its individual investor MAAUM grew at a CAGR of 18.38 per cent from Rs.546.13 billion as of March 31, 2016 to Rs.1,269.82 billion as of March 31, 2021, and further to Rs.1,333.53 billion as of June 30, 2021. Correspondingly, its individual investor MAAUM mix increased from 39.95 per cent as of March 31, 2016 to 47.01 per cent as of June 30, 2021, which was the second highest increase among the five largest AMCs in India by QAAUM. Consistent with leadership position in individual investo,” HDFC Securities said in a note.
The company is the country’s fourth largest fund house and it had an average asset under management of 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 diversified Pan-India distribution presence covering 284 locations spread over 27 states and six union territories. For the quarter ended June 2021, Aditya Birla AMC had an average AUM of Rs 2.84 trillion. it had reported net profit of Rs 155 crore on revenues of Rs 336 crore. The profit after tax of the Aditya Birla AMC was reported at Rs 5,262 in 2021, the revenue in 2020 was standing at 4,944 crore. The profit has risen sharply from 2019, to 2020, and from 2020 to 2021. In 2019, the profit was standing at 4,467 crore.
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