Aditya Birla Sun Life Asset Management Co. has sought the market regulator’s approval to go public, deriving optimism from last year’s IPO frenzy that has extended into 2021.
Aditya Birla Capital Ltd. and Sun Life (India) AMC Investments Inc., which own 51% and 49% stake in the mutual fund house, respectively, have approved sale of up to 28.51 lakh and 36.03 lakh equity shares at a face value of Rs 5 each through the initial public offering, according to a draft red herring prospectus filed with the Securities and Exchange Board of India.
The proposed sale of the equity shares by Aditya Birla Capital and Sun Life India in the IPO will together constitute up to 13.50% stake in the asset manager.
Established in 1994, the AMC has a distribution presence covering 284 locations across 27 states and six union territories. It manages 135 mutual fund schemes and six domestic fund of funds as on Dec. 31, 2020.
The joint venture had total assets under management of Rs 2.74 lakh crore and about 72 lakh investor folios as on Dec. 31, 2020, maintaining its position as the largest non-bank affiliated AMC in India by quarterly average AUM since March 2018.
For the nine months ended December 2020, the company’s total income was Rs 873.63 crore and profit before tax was Rs 488.15 crore.
Its ratio of profit before tax to total mutual fund AAUM for the nine months ended December 2020 was 0.28%, while it stood at 0.23% for financial year ended 2018 and 0.26% each for fiscals ended 2019 and 2020.
Its standalone return on equity of 37.24% for the financial year ended March 2020 was the third highest among the five largest AMCs in India by quarterly average AUM, according to Crisil.
Kotak Mahindra Capital, BofA Securities, Citigroup Global Markets India, Axis Capital, HDFC Bank, ICICI Securities, IIFL Securities, JM Financial, Motilal Oswal Investment Banking, SBI Capital, Yes Securities and Kfin Technologies are the book running lead managers of this proposed IPO.