Aditya Birla Sun Life AMC IPO: Brokerage Views

This post on Aditya Birla Sun Life AMC IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Aditya Birla Sun Life AMC IPO or not.

Related Posts : Aditya Birla Sun Life AMC IPO Review

Anchor Investors:

Ahead of its IPO Aditya Birla Sun Life AMC raised Rs 788.95 crore from 50 anchor investors. Marquee foreign investors include names like HSBC, International Monetary Fund, Abu Dhabi Investment Authority, Morgan Stanley Asia, BNP Paribas, and Societe Generale. Domestic investors, including ICICI Prudential, HDFC Mutual Fund, SBI MF, Axis MF, SBI Life Insurance Company, HDFC Life Insurance Company, ICICI Prudential Life Insurance, UTI MF, Tata AIG General Insurance, Kotak Mutual Fund, IIFL Special Opportunities Fund, Abakkus Growth Fund, Max Life Insurance, and Reliance General Insurance etc.

Aditya Birla Sun Life AMC IPO: Grey Market Premium etc.

• 27-09-21 GMP Rs. 25

Subscription: Aditya Birla Sun Life AMC IPO ( x times)

Day / X times	QIB	NII	Retail	ShrHldrs	Total
Day 3	10.36	4.39	3.24	1.68	5.25
Day 2	0.06	0.40	2.00	0.71	1.08
Day 1	0.00	0.14	1.09	0.31	0.56
Total Retail Applications	~ 1566352
Appl wise Retail	2.42 x

Consolidated Brokerage Views on Aditya Birla Sun Life AMC IPO

Anand Rathi : “Given that the company is the largest non-bank affiliated AMC and among the four largest AMCs in India with well-recognised promoters, growing individual investor customer base, diverse product portfolio with high RoNW (return on net worth) of 30.87 per cent in FY21, we give this IPO a Subscribe rating.”

Angel One :”Subscribe: Aditya Birla AMC has witnessed a steady growth in AUM 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% of AUM in Q1FY2022 as compared to 30.5% of AUM from 30.5% of AUM at the end of FY2020. 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.”

Capital Market : score 50/100 ; TTM EPS for the period ended June 2021 works out to Rs 20.3. The scrip is offered at P/E multiple of 35.1 times TTM EPS for the period ended June 2021 at the upper price band. The book value of the company is Rs 62.6 end June 2021. The scrip is offered at a P/BV multiple of 11.4 times at the upper price band. HDFC AMC is trading at P/E multiple of 47.9 times TTM EPS of Rs 64.2 for the period ended June 2021. Nippon Life India Asset Management is trading at P/E multiple of 37.9 times TTM EPS of Rs 11.4 for the period ended June 2021 and UTI AMC is trading at P/E multiple of 25.4 times TTM EPS of Rs 43.2 for the period ended June 2021.HDFC AMC is trading P/BV multiple of 13.2 times BV end June 2021, Nippon Life India Asset Management at 8.3 times and UTI AMC at 4.1 times. Aditya Birla Sun Life AMC is valued at Rs 20506 crore at upper price band and is offered at 0.072 times of AAUM, while HDFC AMC is trading at 0.154 times of AAUM, Nippon Life India Asset Management trading at 0.108 times of AAUM and UTI AMC at 0.071 times of AAUM.”

Choice Broking: “With supportive government policies, financialization of household savings, increasing penetration in the B30 cities, the macros of the domestic mutual fund industry are positive and provide huge scope for growth and development. At higher price band of Rs. 712, ABAMC is demanding a TTM P/E multiple of 35.1x (to its TTM EPS of Rs. 20.3), which is at discount to the peer average of 38.3x. Moreover, based on FY24E earnings, the stock is demanding a P/E valuation of 29.4x, which seems to be attractive for a company with a RoE excess of 25%. Thus considering the above observations, we assign a “SUBSCRIBE” rating for the issue”

Geojit Financial: “At the upper price band of Rs.712, ABSLAMC is available at P/E of 39x (FY21) which appears reasonably priced. We assign a “Subscribe” rating for the issue on a long-term basis considering strong growth prospects in one of the fastest growing economies with a highly under penetrated MF industry.”

Nirmal Bang : “Over FY16-21, ABSL has witnessed strong AUM CAGR of ~15% rising from Rs. 1365 Bn to Rs. 2693 Bn. Revenues and profits have grown at a CAGR of 7% and 21% respectively over the same period. Positive macro-economic factors and a robust industry growth prediction of ~12% CAGR over FY21-FY26E, provide the company with a good opportunity to further grow. ABSL enjoys a strong parentage, solid brand image, a decent distribution network and consistently high ROE of over 30%. We thus recommend to “subscribe for the long term”..

Reliance Securities: “The company’s equity AUM exposure at 36 per cent is lower compared to peers. But it has been doing exceedingly well in improvising its operating efficiency over the years. Therefore, its RoE of 31 per cent in FY21 is superior to NAM and equivalent to that of HDFC AMC. Further, FCF yield at 2.4 per cent looks good. Sustained strong cash flow generation on the backdrop of continued rise in penetration level and improvement in equity AUM is likely to ensure healthy payout, going forward. We recommend Subscribe to the issue from long-term perspective.”

Religare:”ABSL AMC stands to benefit from strong industry prospects as it has a diversified product portfolio and also offers customized solutions to meet financial goals. It has a well-recognized and experienced promoter group (Aditya Birla and Sun Life) which will support in building customer trust as well as improve SIP inflows. Further, the company plans is to improve its customer base as well as gain market share by developing more investment offerings, strengthening relationships with distributors, increasing geographical presence and improving digital platform technology. On the financial front, the company has seen consistent improvement in AUM share and overall performance has been healthy. From the long term perspective, we have a positive view on the company.”

SMC: “The company has seen robust growth, especially in recent years, driven by a growing investor base due to increasing penetration across geographies, strong growth of capital markets, technological progress, and regulations to make mutual fund products more transparent and investor-friendly. With the rising investments interest of the investors in stock markets and increasing numbers of Demat accounts, the company is poised for good growth going forward. Investors may opt the issue with a long term perspective.”

Swastika Investmart “The AMC industry has grown tremendously in recent years on the back of strong flows by the individuals as the AMC companies are increasing penetration across geographies. Also, the tech easiness is helping the millennials to get access to AMC easily. At the upper price band of Rs 712, the PE works out to be 33x based on annualized FY22 earnings which is slightly lower than peers. So there is room for minor listing gain also the IPO is purely OFS based. Thus, we assign a “SUBSCRIBE” rating to the IPO for the long-term investors. We believe that going forward the company will get benefit as the millennials are keen into the stock market and we have seen tremendous account opening which will lead to flow in AMC too.“

Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.