Aditya Birla Sun Life AMC receives Sebi's final approval for IPO

Aditya Birla Sun Life Asset Management Company (AMC) has received final approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO).

Senior officials in the fund house confirmed the development, but did not give a time frame for the launch of the IPO. 

“With the clearance we will come out with the IPO very soon,” said the official.

Sources say that the IPO size could be around Rs 2,000 crore and this will value asset managers at nearly Rs 15,000 crore.

The fund house had filed its draft red herring prospectus (DRHP) with the markets regulator in April this year. 

However, the offer document was put in abeyance for some time due to an alleged violation concerning a group company.

But now SEBI has given its final go ahead, clearing the decks for the country's fourth mutual fund IPO.

Currently, ABCL holds a 51 per cent stake and Sun Life has a 49 per cent stake in the AMC. Following the IPO, the total promoter stake in the fund house will fall from 100 per cent at present to 86.5 per cent.

Aditya Birla Sun Life AMC is currently India’s fourth-largest (and the largest non-bank affiliated) fund house with assets under management (AUM) of nearly Rs 2.74 trillion as of December 2020. The asset manager has retained its fourth position since September 2011 in terms of quarterly average AUM, according to the DRHP. At the end of March 2020, the fund house ranked sixth in terms of total folios -- 7.2 million.

The data from Association of Mutual Funds in India (Amfi) shows that the fund house had an average AUM of Rs 2.75 trillion for April-June quarter. However, the assets crossed the Rs 3 trillion mark in July 2021.

Continued focus on building retail customer franchise with 7.2 million folios and Rs 1.33 trillion of retail AUM, was up 30% year on year. The fund house posted profit after tax (PAT) of Rs 155 crore in the first quarter of the current fiscal compared to Rs 97 crore in the previous financial year, a growth of around 59 per cent.

The fund house has seen an improvement in the higher share of individual investors, from 40 per cent in March 2016 to 46.5 per cent in December 2020 – the second-best increase among the top five AMCs.