Aditya Birla Sun Life AMC IPO Opens Today. Should You Invest?

Aditya Birla Sun Life AMC's Rs 2,768.25 crore initial public offering (IPO) opens for bidding today i.e. September 29. The IPO is an offer for sale of up to 28.51 lakh shares by Aditya Birla Capital and up to 3.6 crore shares by Sun Life AMC. The primary market offering will close on October 1. The shares will be offered in the price band of Rs 695-712 per share.

Investors can bid for a minimum of 20 shares and in multiples of 20, up to 13 lots. A total of 50 per cent of the issue size has been reserved for qualified institutional buyers, 35 per cent for retail investors and 15 per cent for non-institutional investors.

Aditya Birla Sun Life AMC is a joint venture between the Aditya Birla Group and the Sun Life Financial Inc of Canada. It had average assets under management of Rs 2.93 lakh crore as of the June quarter and manages 118 schemes.

Kotak Mahindra Capital Company, BofA Securities, Citigroup Global Markets India, Axis Capital, HDFC Bank, ICICI Securities, IIFL Securities, JM Financial, Motilal Oswal Investment Advisors, SBI Capital Markets and YES Securities (India) are the merchant bankers to the issue.

Should You Invest in the IPO of Aditya Birla Sun Life AMC? Here's what brokerages have to say

Angel One

"Aditya Birla AMC has witnessed a steady growth in AUMs since 2016 and has also been constantly increasing the share of Individual AUM within the mix. Moreover, the share of high margin equity AUM has normalized to 36.5 per cent of AUM in Q1FY2022 compared to 30.5 per cent of AUM from 30.5 per cent of AUM at the end of FY2020," Angel One said in a note to its investors.

"At the higher end of the price band the AMC will be trading at market/AUM of 7.3xQ1FY22 Avg. AUM which is at a discount to Nippon Life AMC and at a similar level to that of UTI AMC. Given the discount to Nippon AMC and strong growth prospects of the AMC due to a buoyant capital market, we would recommend to SUBSCRIBE to the IPO," the brokerage added.

Anand Rathi

"At the upper end of the IPO price band, Aditya Birla Sun Life AMC is offered at P/E of 39x its FY21 earnings, with a market capitalization of Rs 205,056 million," Anand Rathi said in a an investor note.

"Given that the company is the largest non-bank affiliated AMC and among the four largest AMCs in India with well recognized promoters, growing individual investor customer base, diverse product portfolio with high RoNW of 30.8in FY21 - We give this IPO a "Subscribe" rating," Anand Rathi added.