Aditya Birla Sun life AMC with Rs 2,736.43 billion assets under management as per record till 30th December 2020 has opened its IPO on 29th September 2021 with a window of 3 days. The nonbank affiliate asset management company has set its price band of IPO at Rs 695 to Rs 712 per equity share with a Rs 5 per equity share as the face value.
The IPO has no fresh issue, it has only an offer for sale of Rs 2,768.26 crore with a total of 38,880,000 equity shares for sale by existing shareholders. The net proceeds from IPO will not go to the company, it will directly be going to the shareholders selling their shares in their proportion. The company will only reap the benefit of listing the firm on the exchange.
The company was the fourth-largest AMCs in India by QAAUM in September of 2011. according to its Quarterly Average Assets Under Management (QAAUM), the firm has maintained a position as the largest non-bank affiliated AMC in India, since March 2019.
The IPO is a good opportunity for the long term investors, as the company has strong and experienced promoters as Aditya Birla Capital Limited (ABCL) and Sun Life (India) AMC Investments Inc. Thus, the company enjoys a great sense of reputation in the market and has a large and varied customer base. Further to add to the strength of the company is that it has a solid plan to grow its investor customer base through strong systematic flows and B-30 Penetration. Secondly, it has a diverse product that is backed and supported by research-driven philosophy.
However, the systematic risk, the market is facing due to COVID-19 is unavoidable and has had an impact on the company. Any changes to Assets under management can impact the overall performance of the firm. It might even become a loss-making factor for the clients. This concern is somehow covered with well researched driven decision-making philosophy.
At the grey market, the AMC is already trading at a premium of Rs 45, thus we can expect a listing gain. Further AMC has witnessed a steady growth rate. On the higher side of the price band, Aditya Birla AMC is trading at 7.3xQ1FY22 Avg of market/AUM, which is at a discount in comparison to its peers Nippon Life AMC. Thus there is a higher growth prospect for the firm. Long-term investors can certainly take this up and a trader might take it up for some listing gain. All in all Aditya birla AMC is good to go IPO. But all the investors must do their homework before jumping into the decision to take up the investment or not. Because after all, it’s all about your hard earn money, who else can take care of it more than you.