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Salient features of the IPO:

* Aditya Birla Sun Life AMC Ltd. (ABAMC) - the country’s largest nonbanking affiliated fund house is coming up with an IPO to raise Rs. 2,770cr, which opens on 29th Sept. and closes on 1st Oct. 2021. The price band is Rs. 695 - 712 per share.

* The company is promoted by Aditya Birla Capital Ltd. (ABCL) and Sun Life (India) AMC Investments Inc.

* The issue consists of only OFS portion. As a result, the company will not receive any proceeds from it.

Key competitive strengths:

* Largest non-bank affiliated asset manager in India

* Well-recognized brand with experienced promoters

* Growing individual investor customer base driven by strong systematic flows and B-30 penetration

* Diverse product portfolio with fund performance supported by research driven investment philosophy

* Pan-India, diversified distribution network

* Long-term track record of innovation and use of technology

* Franchise led by experienced and stable management and investment teams

Risk and concerns:

* Slow revival in economic activities post pandemic

* Decline or volatility in global & domestic equity markets

* Changes in interest rates and defaults

* Unfavorable composition of AUM

* Intense competition

* Unfavorable regulation

Below are the key highlights of the company:

* Since Mar. 2018, ABAMC is ranked as the largest non-bank affiliated AMC in India and among the top-4 largest AMCs in India since September 30, 2011. As of 30th Jun. 2021, it managed total asset under management (AUM) of Rs. 2.9tn, under various schemes of mutual funds, portfolio management services, offshore and real estate offerings.

* As of 30th Jun. 2021, the company managed 118 schemes comprising of 37 equity schemes, 68 debt schemes, two liquid schemes, five ETFs and six domestic FoFs. Its flagship schemes include Aditya Birla Sun Life Frontline Equity Fund and Aditya Birla Sun Life Corporate Bond Fund, both of which have grown to become one of the leading funds in India.

* Equity-oriented schemes generally generate higher management fees. Between Mar- 2016 and Jun. 2021, ABAMC witnessed a 14.4% increase in equity-mix, which was greater than the sector’s increase of 13.7%. This was also the second highest among the top-five AMCs and the fourth highest among the top-10 AMCs. As of 30th Jun. 2021, ABAMC’s equity AUM was ranked fifth among its top-10.

* ABAMC has seen a consistent improvement in AUM share from B-30 in the last three years. Among the top-5 AMCs, the company has witnessed highest improvement in the business contribution from the B-30 during Mar. 2019 and Jun. 2021. It is the fifth largest player in the individual investor’s AUM among the top-10 AMCs. Correspondingly, its individual investor-mix increased from 40% (as of 31st Mar. 2016) to 47% (as of 30the Jun. 2021), which was the second highest increase among the top-5 largest AMCs in India.

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