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Aditya Birla Sun Life AMC – the shark stepping into the IPO puddle4 min read

September 29, 2021 4 min read

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Aditya Birla Sun Life AMC – the shark stepping into the IPO puddle4 min read

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Aditya Birla Sun Life AMC Limited (ABSLAMC) is a joint venture between the Aditya Birla Capital Limited and Sun Life (India) AMC Investments Inc. 

The company’s main focus is to cater to the customers’ needs across their life cycle -and has marked its presence and dominance in the  sector across continents.

The Aditya Birla Group of Companies has adopted the motto of “To be a leader and role model in a broad-based and integrated financial services business.” Aditya Birla Capital Limited (ABCL) is the holding company for the financial services businesses of the Aditya Birla Group.

All about Aditya Birla Sun Life AMC IPO: 

The Aditya Birla Sun Life AMC is live with its Rs. 2,768 crores Initial Public Offering (IPO). The IPO opened for subscription today – on September 29 and will close on October 1.

The issue will entirely be an offer-for-sale of up to 28.51 lakh equity shares by  the company and up to 3.6 crore equity shares by Sun Life AMC. The price band of the issue is fixed between Rs. 695 – Rs. 712 per share and the face value of each share is Rs. 5. The lot size is 20 shares. 

Company Glimpses:

Aditya Birla Sun Life AMC is ranked as the largest non-bank affiliated AMC in India by QAAUM since March 31, 2018.

Ever since it’s inception in 1994, the company has managed to introduce 118 schemes comprising 37 equity schemes (including, among others, diversified, tax saving, hybrid and sector schemes), 68 debt schemes (including, among others, ultra short-duration, short-duration and fixed-maturity schemes), two liquid schemes, five ETFs and six domestic FoFs, as of June 30, 2021.

The company is ranked as the largest non-bank affiliated AMC in India by QAAUM since March 31, 2018, and among the four largest AMCs in India by QAAUM since September 30, 2011, according  to the available reports.

With the proceeds from the IPO, the company wishes to achieve the benefits of listing the Equity Shares on the Stock Exchanges. They further plan to carry out the Offer for Sale of up to 38,880,000 Equity shares by the Selling Shareholders.

Services offered by the company:

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The company provides sector specific equity schemes, fund of fund schemes, hybrid and monthly income funds, debt and treasury products and offshore funds. ABSLAMC has various business vertices such as Portfolio Management Services, Real Estate Investments and Alternative Investment Funds. 

  • The Portfolio Management Service  – It is a highly customized service designed to seek consistent long term results by adopting a research based, methodical approach to investing.
  • The Real Estate Investment Advisory (REIA) – It is a business is a platform that enables investors to access ‘Real Estate Investments’ opportunities meant for investors on a private placement basis.
  • Lastly, ABSLAMC also acts as an investment manager to Aditya Birla Sun Life AIF Trust – I which is formed as a Trust under Category III Alternative Investment Fund (AIF). ABSLAMC has its subsidiaries in Dubai, Mauritius and Singapore.

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Company’s Financial Data:

Aditya Birla

The company’s total QAAUM (excluding their domestic FoFs) has grown over the years and was Rs.2,754.54 billion, Rs.2,692.78 billion, Rs.2,475.22 billion and Rs.2,464.80 billion as of June 30, 2021 and March 31, 2021, 2020 and 2019, respectively. In addition, the company provides portfolio management services, offshore and real estate offerings and it managed a total AUM of Rs.115.15 billion as part of such services, as of June 30, 2021.

Competitors in the market:

The biggest competitors of Birla Sun Life currently are players like HDFC Asset Management Company, Nippon Life India Asset Management and UTI Asset Management Company.  In terms of total income, Aditya Birla Sun Life AMC is the third largest company, but highest in terms of return on net worth in FY21 at 30.87 percent.

Industry overview and what lies ahead for the company: 

According to a report by Moneycontrol Growth in the industry is expected to be driven by (i) a pick-up in corporate earnings following stronger economic growth, higher disposable income and investible household surplus (iii) increase in aggregate household and financial savings (iv) deeper regional penetration as well as better awareness of mutual funds as an investment vehicle (v) continuous improvement in ease of investing, with technological innovations and an expanding internet footprint (vi) and the perception of mutual funds as long-term wealth creators, driven in part by initiatives such as the Mutual Fund Sahi Hai campaign.

According to media reports, Aditya Birla Sun Life AMC has maintained a market leading position in B-30 (beyond top 30 cities) penetration over the years, which has contributed to the growth of its individual investor base as well as the improvement in profitability.

Going ahead, Aditya Birla Sun Life AMC  intends to continue to leverage digital platforms to increase customer acquisition and enhance customer experience.

The AMC intends to enhance its product portfolio by developing investment offerings.

Sources – RHP, BLRM, Money Control 

Disclaimer – This content is purely for informational purposes and is in no way advice or recommendation.

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