Business strategy

Time, Listing Share Price, Others

Aditya Birla Sun Life AMC stock is all set to enter the stock market on Monday. Aditya Birla Sun Life AMC share will get listed at National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) at 10 am on October 11. The initial public offer (IPO) of Aditya Birla Sun Life AMC received a muted response from investors when it had open for open subscription. Aditya Birla Sun Life AMC IPO received bids of nearly 14.60 crore shares against the total issue size of nearly 2.78 crore shares, according to National Stock Exchange (NSE) data. The price band for Aditya Birla Sun Life AMC IPO was fixed at Rs 695-712 per share.

The low grey market premium and lower-than-expected response subscription, complete offer for sale issue could indicate marginal listing gain for Aditya Birla Sun Life AMC IPO. Most of the analysts expect that Aditya Birla Sun Life AMC IPO will start first trade with 5-10 per cent listing gain and it could go up to 10-15 per cent at the best.

Aditya Birla Sun Life AMC IPO is entirely an offer for sale (OFS), wherein two promoters — Aditya Birla Capital and Sun Life (India) AMC Investments — will divest their stake in the asset management firm. Aditya Birla Sun Life AMC IPO was subscribed 5.25 times during September 29-October 1, largely supported by qualified institutional buyers. The portion allocated for the qualified institutional buyers (QIBs) was subscribed 10.36 times. The share set aside for non institutional investors was booked 4.39 times while those of retail individual investors (RIIs) was subscribed 3.24 times.

“We expect marginal listing gains, one may book profits on the listing day. To get a good amount of return one may hold it as you know ,if its undervalued the price will start rising tremendously. Such pattern have been seen in IPO peers like CAMS, UTI AMC, as well as market is bullish,” said Manoj Dalmia, founder and director, Proficient Equities Private limited.

Ahead of the listing, Aditya Birla Sun Life AMC unlisted shares traded at a price of Rs 732-737 in the grey market. The grey market premium of Aditya Birla Sun Life AMC was Rs 20-25, 2.8-3.5 per cent over the issue price of Rs 712 per share, according to the IPO Watch and IPO Central data.

“At the upper end of the IPO price band, Aditya Birla Sun Life AMC Ltd. is offered at P/E of 39x its FY21 earnings, with a market capitalization of ₹205,056 Million. 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 30.87 per cent in FY21,” said Anand Rathi Communications in a note.

“The company offers a range of systematic transaction options and add-on features including SIPs, STPs and SWPs. As of June 30, 2021, SIPs have become a material proportion of the AUM accounting for 41.7 per cent of total equity-oriented mutual fund AUM and 34 per cent of total individual investor mutual fund AUM. The outstanding SIPs grew from 8.6 lakhs as of March 31, 2016, to 28 lakhs as of June 30, 2021, and SIP AUM grew from Rs 8,523 crore to Rs 45,692 crore over the same period. The share of SIP AUM in total equity-oriented mutual fund AUM increased from 25.7 per cent to 41.7 per cent during the same period, which was higher than the industry shares of 31.36 per cent as of June 30, 2021. As of June 30, 2021, 86.31 per cent of outstanding SIPs had more than 5-year vintage, while 77.05 per cent of outstanding SIPs had a more than 10-year vintage depicting customer stickiness,” according to ICICI Securities said in a note.

Post issue, market capitalisation at upper band will be Rs 20,505 crore. At Rs 712, the stock is available at 7.4 per cent Q1FY22 QAAUM and at 33.1x Q1FY22 PAT, the brokerage house further added.

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