The initial public offering of Aditya Birla Sun Life AMC, a joint venture between Aditya Birla Capital and Sun Life (India) AMC Investments, has seen a subscription of 107 percent as it received bids for 2.98 crore equity shares against IPO size of 2.77 crore equity shares, the data available on exchanges showed.
The IPO size was reduced from 3.88 crore equity shares to 2.77 crore after the company mopped up Rs 789 crore from several anchor investors at Rs 712 per share, the upper price band.
The portion set aside for retail investors was subscribed 2 times and shareholders of Aditya Birla Capital have put in bids for 67 percent of portion reserved for them.
Non-institutional investors bought 40 percent of their reserved portion, while qualified institutional buyers have put in bids for 4.53 lakh equity shares against their reserved portion of 73.87 lakh shares.
Aditya Birla Sun Life AMC, the 4th largest asset management company in terms of quarterly average assets under management (QAAUM), plans to garner Rs 2,768 crore through its public issue at higher end of price band of Rs 695-712 per share. This is an offer for sale by both promoters - Aditya Birla Capital and Sun Life AMC.
"At upper price band, IPO is priced at a price-to-earnings (P/E) of 33x discount to peers (Nippon India P/E of 39x and HDFC AMC with P/E of 50x)," said IDBI Capital in its note.
The brokerage further said, "With focus on growing market share through higher distribution tie-ups, increasing margin accretive business through ETF and equity asset classes and improving presence in B-30 centers, we believe that the company can grow AUM in line with the industry at 12-14 percent over the next 5 years." It recommended subscribing the issue.
Aditya Birla Sun Life AMC is the largest non-bank affiliated AMC as of June 2021 with an AUM of Rs 2.9 lakh crore, a market share (based on QAAUM) of 8.5 percent in the industry and a client base accounts 70 lakh folio. Its profit has grown at a CAGR of 15 percent during FY18-FY21, and return on equity has improved by 700bps during the same period to 33.7 percent.
After closing the issue on October 1, the IPO share allotment will get finalised on October 6. The funds will be refunded to ineligible investors by October 7, and the successful investors will get share in their demat accounts by October 8.
Equity shares will start trading on the BSE and NSE from October 11. In the grey market, Aditya Birla Sun Life AMC shares traded at Rs 747-757 per share, a tepid premium of Rs 4.9-6.3 percent over upper price band of Rs 712 per share, the IPO Watch and IPO Central data showed.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.