About Company:
Incorporated in 1994, Aditya Birla Sun Life AMC is set up as a joint venture between ABCL and Sun Life AMC. The company managed a total AUM of ₹2,736.43 Bn under mutual fund (excluding domestic FoFs), portfolio management services, offshore and real estate offerings, as of December 31, 2020. The company managed 135 schemes comprising 35 equity, 93 debt, 2 liquid schemes, 5 ETFs, and 6 domestics FoFs as of December 31, 2020. The company’s Monthly average assets under management (MAAUM) from institutional investors were ₹1,412.43 Bn as of December 31, 2020, which was the fourth-largest among its peers, according to CRISIL.
The company has automated and digitized several aspects of its operations including in relation to customer on boarding, online payments and other transactions, fund management, dealing, accounting, customer service, data analytics, and other functions.
Competitive strengths:
- Largest Non-bank Affiliated Asset management company of India.
- Well recognized and trusted brand with experienced promoters.
- Rapidly growing customer base.
- Well-Diversified product portfolio and innovative schemes
Company Promoters
Aditya Birla Capital Limited (ABCL) and Sun Life (India) AMC Investments Inc. are the company promoters.
Company Financials:
On the financial performance front, ABSLAMC has posted total income/net profits of Rs. 1407.25 cr. / Rs. 446.80 cr. (FY19), Rs. 1234.77 cr. / Rs. 494.40 cr. (FY20) and Rs. 1205.84 cr. / Rs. 526.28 cr. (FY21). For the Q1 of FY 22 ended on June 30, 2021, it has posted a net profit of Rs. 154.94 cr. on a total income of Rs. 336.25 cr. compared to Rs. 97.35 cr. / Rs. 260.75 cr. respectively for the corresponding previous period. Thus it has been reporting growth in bottom lines despite declining top lines. This surge in profits is attributed to declining fees and commission expenses from time to time.
Positive Factors:
- Aditya Birla Sun Life AMC is the 4th largest AMC in India. ABSL AMC offers 118 mutual fund schemes comprising of equity funds, debt mutual funds, fund of funds, liquid funds and ETFs.
- There is increased awareness about mutual fund schemes and investors are inclined to move their savings in mutual funds.
- Company has generated strong margin growth in the last 3 years. Its margins increased from Rs 446 Crore in FY19 to Rs 526.2 Crores in FY21.
- Company Return on Net Worth (RoNW) is highest among the listed AMCs in India. Its RoNW is 30.87% compared to HDFC AMC (27.7%), Nippon Life India AMC (21.9%) and UTI AMC (15.2%)
Risk Factors:
- Its revenues are in declining mode in the last 3 years. Its revenues for FY19, FY20 and FY21 are Rs 1,407.2 Crores, 1,234.7 Crores and Rs 1,205.8 Crore respectively.
- The IPO issue is 100% Offer for Sale (OFS). The issue proceeds would go to selling share holders and company would not get any money for future expansions.
- The extent to which Covid-19 may affect company business in the future is uncertain and cannot be predicted.
- Credit risks related to debt portfolio of its funds can expose its funds to losses which can affect the business.
Objects of the Issue:
The net proceed from the IPO will be utilized towards the following purposes;
- Achieve the benefits of listing the Equity Shares on the Stock Exchanges; and
- Carry out the Offer for Sale of up to 38,880,000 Equity Shares by the Selling Shareholders.
IPO Details:
