ICICI Prudential AMC IPO — From Issue Details, Valuations To Key Risks: Read Nirmal Bang Report Before You Bid

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Nirmal Bang Report

About ICICI Prudential AMC IPO

ICICI Prudential Asset Management Company Ltd. will launch its initial public offering on December 12 and the offer closes for subscription on Dec. 16.

India’s largest asset manager by active QAAUM with a 13.3% market share has fixed the price band in the range of Rs 2,061 to Rs 2,165 per equity share with a face value of Rs 1.

The Rs 10,602.7 crore IPO is entirely an Offer for Sale (OFS) by Prudential Corporation Holdings Ltd., one of the promoters.

To participate in the IPO, retail investors are required to bid for a single lot size of six shares, amounting to a minimum investment of Rs 12,990 per application based on the upper limit of the issue price.

IPO Structure and Allocation

The offer comprises 50% for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors. There is no fresh issue, and the entire proceeds will go to the selling shareholder. Post-IPO, the promoter group’s stake will reduce from 100% to 90.1%, while public shareholding will stand at 9.9%.

Compelling Valuation:

Based on FY25 financials, the stock is valued at a P/E multiple and a Price/Operating Profit multiple of 40.4x and 33.1x, respectively, both below its immediate listed peer.

ICICI Prudential AMC offers a compelling investment proposition due to its leadership in profitable equity segments, its industry attractions, and a relative valuation discount.

Key risks

• Market volatility and AUM dependence: The company's revenue is primarily derived from management fees calculated as a percentage of AUM. Significant declines in equity or debt markets due to macroeconomic factors can erode AUM, directly impacting revenues and profitability.

• Investment underperformance: The inability of schemes to outperform benchmarks or peers could lead to fund outflows, loss of market share, and reputational damage. For instance, 17.1% of the company's equity/debt AUM underperformed benchmarks over a 3-year period as of Sep25.

• Competition: The industry is intensely competitive with 54 registered AMCs. Fee pressure from competitors or the rise of low-cost passive products could compress margins.

• Regulatory risk: The AMC business is highly regulated by SEBI. Changes in Total Expense Ratio (TER) limits, commission structures, or classification of schemes can adversely impact profitability. For example, SEBI's consultation paper (Oct-25) proposes excluding statutory levies from TER, potentially reducing margins.

• Concentration risk: A significant portion of AUM is concentrated in a few schemes. As of 1HFY26, the top 5 equity schemes accounted for 53.4% of the company's equity QAAUM.

• Dividend policy change: Any adverse change in dividend policy could be a negative.

• Threat from passives: Any shift in investor preference from active to passive (which usually have lower fees) could adversely affect fee income for the group.

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