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Aditya Birla Sun Life AMC IPO opens; should you subscribe?

Aditya Birla Sun Life AMC IPO opens; should you subscribe?

Aditya Birla Sun Life AMC IPO opens; should you subscribe?
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By CNBCTV18.com Sept 29, 2021 10:54:59 AM IST (Updated)

Under the Aditya Birla Sun Life AMC IPO, shares will be available for bidding in multiples of 20 in the price band of Rs 695-712.

Aditya Birla Sun Life AMC's initial public offering (IPO) of Rs 2,768 crore opened for subscription on Wednesday. The public issue is entirely an offer for sale, wherein existing shareholders will be selling around 3.9 crore shares. The IPO will close for subscription on Friday, October 1.

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Under the Aditya Birla Sun Life AMC IPO, shares will be available for bidding in multiples of 20 in the price band of Rs 695-712. At the upper end of the price band, one lot will cost investors Rs 14,240 for bidding.
The proposed sale of equity shares by Aditya Birla Capital and Sun Life India in the IPO will together constitute up to 13.5 per cent of the paid-up share capital of Aditya Birla Sun Life AMC.
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Aditya Birla Sun Life AMC, the investment manager of Aditya Birla Sun Life Mutual Fund, is a joint venture between Aditya Birla Group and Canada's Sun Life Financial. Its listed peers are Nippon Life India Asset Management, HDFC AMC and UTI AMC.
On Tuesday, Aditya Birla Sun Life AMC said it had collected Rs 789 crore from anchor investors ahead of the IPO.
Should you subscribe to Aditya Birla Sun Life AMC's IPO?
Here's what brokerages say:
Nirmal Bang
The brokerage recommends subscribing to the IPO from a long-term perspective.
"Positive macroeconomic factors and a robust industry growth prediction of around 12 percent CAGR over FY21-FY26E provide the company with a good opportunity to grow further," it said.
"ABSL enjoys a strong parentage, solid brand image, a decent distribution network and consistently high RoE of over 30 percent," Nirmal Bang added.
Religare Broking
The company has seen consistent improvement in its AUM share with an overall healthy financial performance, said the brokerage, which has a positive view on Aditya Birla Sun Life AMC from a long-term perspective.
Over the past 10 years, mutual fund assets in India have seen robust
growth with the average AUM growing at a CAGR of 16.4 percent. "Going forward, the overall industry’s AUM is projected to grow 11-13 percent from 2021-2026 and reach Rs. 57 lakh crore, largely driven by a pickup in corporate earnings following stronger economic growth, higher disposable income and investable household surplus, improving technology and expanding internet footprint and better awareness of mutual funds as long-term wealth creators," the brokerage said.
ABSL AMC stands to benefit from strong industry prospects as it has a
diversified product portfolio, and offers customised solutions to meet
financial goals, according to Religare Broking.
"It has a well-recognised and experienced promoter group which will support in building customer trust as well as improve SIP inflows. Further, the company plans is to improve its customer base as well as gain market share by developing more investment offerings, strengthening relationships with distributors, increasing geographical presence and improving digital platform technology," it added.
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