ICICI Prudential AMC shares to list Friday: This brokerage gives 'Buy' rating, sees up to 39% upside from IPO price

ICICI Prudential AMC IPO

The shares of ICICI Prudential Asset Management Company are set to make their much-awaited market debut on December 19 (Friday). Ahead of listing, the shares got their first 'Buy' rating from PL Capital Institutional Equities, which sees strong upside potential for the stock.

The Rs 10,603-crore IPO closed yesterday after being subscribed 39 times its offer size between December 12 and December 16 at a price band of Rs 2,061-2,065 per share. The allotments will likely be finalized later tonight (December 17).

PL Capital on ICICI Prudential AMC:

PL Capital initiated coverage on the soon-to-be-listed shares of ICICI Prudential AMC with a 'Buy' call and a target price of Rs 3,000 apiece. This implies an upside potential of nearly 39 percent from the IPO price of Rs 2,165 per share.

The domestic brokerage said that it is optimistic about ICICI Prudential AMC's business prospects, given its strong performance and parentage which is driving the highest net equity flow market share among AMCs, superior equity yields, and more.

ICICI AMC may eventually command a premium to HDFC AMC due to its better distribution and diversification while having similar profitability, PL Capital further said.

"ICICI AMC has shown the best performance in 1-yr bucket, while being ranked consistently among top 3 in the 3-yr bucket since Feb'22," it further said, adding ICICI Bank is providing access to a vast distribution network of 7,246 branches and integration with bank's digital platforms.

"Over FY25-28E, we expect 23%/21% CAGR in equity/overall AAuM compared to 20%/19% for industry, which would translate to revenue/opex/core income CAGR of 18%, 17% and 18.5%, respectively. Core PAT to AAuM should range at 26-27bps (like HDFCAMC). At the upper bank of the IPO price, stock is valued at ~27x which suggests a discount of ~17% to HDFCAMC; we assign a multiple of 38x on Sep’27 core EPS to arrive at TP of Rs 3,000," PL Capital said.

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