Aditya Birla Sun Life Asset Management Company (AMC) awarded shares worth Rs 789 crore to major investors on Tuesday. The CMA allocated nearly half of the lead investor share to eight domestic mutual funds. National funds that received shares include ICICI Prudential, HDFC Mutual Fund, SBI, Axis, Invesco India, UTI, Kotak and Edelweiss. Other prominent key investors include Abu Dhabi Investment Authority, HSBC, Morgan Stanley Asia, among others.
Aditya Birla AMC is considering valuations of Rs 20,500 crore in its initial public offering (IPO), the fourth by a national mutual fund company.
The price range is Rs 695-712 per share. At the upper band level, the size of the program would be Rs 2,768 crore.
The IPO will be a secondary stock sale by promoters Aditya Birla Capital (ABCL) and Sun Life AMC.
The domestic partner sells 2.85 million shares – less than one percent of its stake – to raise around Rs 203 crore. Meanwhile, Canadian company Sun Life will sell 12.56 percent of its stake, or 36 million shares, to raise Rs 2,565 crore at the high end of the price range.
Currently, ABCL owns a 51 percent stake, while Sun Life holds the remaining 49 percent. After the IPO, the promoter’s total stake in the fund company will drop from the current 100 percent to 86.5 percent.
Aditya Birla AMC is the country’s largest non-bank affiliate fund company in terms of assets under management (AUM) and fourth overall.
For the quarter ended in June 2021, Aditya Birla AMC had an average assets under management of Rs 2.84 trillion. He had reported a net profit of Rs 155 crore on income of Rs 336 crore.
UTI AMC was the last MF to come out with an IPO. Its stock has more than doubled since its listing a year ago.
Given their strong fundamentals and return on equity (RoE) ratio, investors have been bullish on AMC stocks. Analysts said space companies have high growth potential given the low penetration of financial products in the country. However, tighter regulations and the focus on reducing costs are seen as headwinds for the industry.
The IPO opens on September 29 and ends on October 1.