Aditya Birla Sun life AMC Limited IPO details – Date, Price, Size, Allotment Status, Subscription

IPO-Note	Aditya Birla Sun life AMC Limited
Rs 695- Rs 712  per Equity share	Recommendation: Subscribe

Company Profile: –

Aditya Birla sun life AMC is a joint venture between Aditya Birla Capital Limited (ABCL) and Sun Life AMC. Aditya Birla Sun Life AMC Ltd, is the fourth largest asset management company in India in terms of assets under management (AUM) and the largest non-bank mutual fund. It has total assets under management of Rs.275,454 crore as of the end of June quarter. More than 50% of its AUM comes from institutional customers, which is one of the reasons why the AMC is very strong in terms of non-equity AUM. It has achieved this leadership position through its focus on consistent investment performance, extensive distribution network, brand, experienced management team, and superior customer service. Aditya Birla Sun Life AMC posted a CAGR of 23.58% between March 2016 and March2020 in its equity AUM, which is the third highest among the top five AMCs and the fifth highest among the top 10 AMCs.

 

 

Issue Details
Objects of the issue	·To achieve benefit of listing the Equity share on the stock Exchange · The company expect that listing will enhance its visibility and brand image of the company.
Issue Size	Total issue Size – Rs.2768.26 Cr. Offer for Sale – Rs.2768.26 Cr.
Face value	Rs.5.00 Per Equity Share
Issue Price	Rs. 695 – Rs. 712
Bid Lot	20 shares
Listing at	BSE, NSE
Issue Opens:	29nd  Sep, 2021 – 1st Oct, 2021
QIB	50% of Net Issue Offer
Retail	35% of Net Issue Offer
NIB	15% of Net Issue Offer

 

 

Financial Performance:

Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Promoters & Promoter Group	100%	86.50%
Public	–	13.5%

Source: RHP, EWL Research

Strengths:

• Good mix of retail and institutional clients as well as equity and debt scheme.
• SIPs is material portion of ABSLAMC’s AUM and account 41.70% of the total equity oriented mutual fund AUM which is sticky portfolio as individual don’t stop SIP regularly.
• The Company has a geographically diversified pan-India distribution presence that is not only extensive but multi-channeled, with a significant physical as well as digital presence.
• Present in the industry with growth tailwind in the long term.

Key Highlights:

• Revenue from operations saw a growth at a CAGR of -7.4% from FY18-21 and profit growth at a CAGR of 8.5% from FY 18-21.
• PAT Margin improved from 31.7% in FY20 to 43.6% in FY21
• As on June 2021 debt portion of the AUM constituent 41.2%, equity portion is 38.1% and money market form 20.4% of monthly Average AUM
• As on March 2020 cash flow from operating Activity was ₹497 crores.
• The total cost to income ratio dropped to 49.32% in the F.Y 20 from 56.64% in the F.Y 2019.
• ROE of the company improved from 36.70% to 37.24% in 2020.
• In 1^st quarter revenue improved to 332cr and profit improved to ₹ 155 cr.

Risk Factors:

• The increase in popularity of low margin product like ETFs and index fund can reduce profitability of the company.
• Regularity cap on fees can impact profitability of the company.
• Company is regularly losing market share to big players.

Outlook:

Aditya Birla AMC is one of the leading fund houses in India with a pan India presence offers a wide range of product across equity, debt, and balanced as well as structured asset classes. ABSL AMC provide other service like PMS, real estate Investment and AIF.AMC industry has seen robust growth, especially in recent years, driven by a growing investor base due to increasing penetration across geographies, strong growth of capital markets, technological progress, and regulations to make mutual fund products more transparent and investor-friendly. If we annualized FY22 earning on the post issue paid up equity capital it will be trading at a P/E of 33.09 which is below HDFC and Nippon AMC valuation. Considering the long term growth prospect, lower mutual fund penetration in India and strong promoter backing we recommend SUBSCRIBE for long term.

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