Aditya Birla Sun Life AMC’s Rs 2,768 crore IPO will open for subscription tomorrow amid a falling grey industry premium. The joint venture among Aditya Birla Capital Ltd and Sun Life AMC is supplying 3.88 crore equity shares, constituting 13.50% of the post-present paid-up equity share capital of the business, in a fixed price tag band of Rs 695-712 per share. The initial public supplying of Aditya Birla Sun Life AMC will stay open for subscription till Friday this week. Incorporated in 1994, the JV among Aditya Birla Capital and Sun Life AMC is ranked as the biggest non-bank affiliated AMC in the nation.
Grey industry premium slips
Ahead of the IPO, shares of Aditya Birla Sun Life AMC are trading at a premium of Rs 30-40 per share in the unlisted space. This has come down from a premium of Rs 50 per share at the finish of last week. “The issue is not exactly bad and the company’s performance is in line, however, the pricing of the issue could be called fully priced in,” Manan Doshi, Cofounder of UnlistedArena, a firm dealing in unlisted & pre-IPO shares told TheSpuzz Online. He added that the possibility of added ordinary listing gains from the IPO could be scarce when adding that extended-term investors could nevertheless go for the IPO of Aditya Birla Sun life AMC.
Investors can bid for the IPO in a price tag band of Rs 695 to 712 per share, in a bid lot of 20 shares and multiples thereafter. This translated to a minimum investment of Rs 14,240 for investors. The IPO of Aditya Birla Sun Life AMC situation will completely be an present for sale (OFS) by current shareholders with 28.51 lakh equity shares presented by Aditya Birla Capital and up to 3.6 crore equity shares by Sun Life AMC. Post situation, the promoter group’s shareholding in the business will drop to 86.5% from the existing one hundred% when the public shareholding will boost to 13.5%. Half of the IPO is reserved for Qualified Institutional Buyers (QIB) when 35% is reserved for retail investors and 15% for Non-Institutional Investors (NII).
Aditya Birla Sun Life AMC manages a total Asset Under Management of Rs 2.94 lakh crore below the suite of mutual fund (excluding the domestic FoFs), portfolio management services, offshore and actual estate offerings as of June 30, 2021.
Should you subscribe?
“Considering the TTM adjusted EPS of Rs 20.27 on post-issue basis, the company is going to list at a P/E of 35.13 with a market cap of Rs 20,505 crore while its peers namely HDFC AMC and Nippon Life are trading at a P/E of 49.99 and 38.61 respectively,” mentioned analysts at Marwadi Financial Services. “We assign “Subscribe” rating to this IPO as business is biggest non-bank affiliated asset manager in India with diverse item portfolio and geographically diversified pan-India distribution presence. Also, the business is accessible at affordable valuation as compared to its peers,” they mentioned.
Risks connected with the business involve an improved competitors that may possibly lead to a reduce in industry share along with underperformance of investment portfolio that could effect AUM. “Post issue, market capitalisation at upper band will be | 20505 crore. At | 712, the stock is available at ~7.4% Q1FY22 QAAUM and at ~33.1x Q1FY22 PAT (annualised basis),” mentioned domestic brokerage firm ICICI Direct in a note.
On listing, Aditya Birla Sun Life AMC could join peers such as HDFC AMC, Nippon India Asset Management Limited, and UTI AMC.