On The First Day Of Bidding, 58 Percent Of The Aditya Birla Sun Life AMC IPO Subscribed, Retail Part Fully Booked

After raising Rs 789 crore from anchor investors on September 28, the offer size was cut to 2.77 lakh shares from 3.88 million shares.

On The First Day Of Bidding, 58 Percent Of The Aditya Birla Sun Life AMC IPO Subscribed, Retail Part Fully Booked
On The First Day Of Bidding, 58 Percent Of The Aditya Birla Sun Life AMC IPO Subscribed, Retail Part Fully Booked

On September 29, the first day of bidding, the public issue of Aditya Birla Sun Life AMC, which is ranked as India's largest non-bank affiliated AMC by QAAUM, was subscribed 58 percent. The issue will be out for bidding for three days, until October 1.

According to the subscription data, the offer attracted bids for 1.59 crore equity shares against an IPO size of approximately 2.77 crore equity shares. After raising Rs 789 crore from anchor investors on September 28, the offer size was cut to 2.77 lakh shares from 3.88 million shares. 

Retail investors have bid for 109 percent of their reserved shares, while Aditya Birla Capital shareholders have purchased 57 percent of the total portion allotted for them. Shareholders would receive 19.44 lakh shares out of the total offering size.

A part set aside for non-institutional investors was subscribed 14 percent, while qualified institutional buyers have put in bids for 25,800 equity shares against the reserved portion of 73.87 lakh shares. Half of the offered size is reserved for qualified institutional buyers, 15 percent for non-institutional investors and the rest 35 percent for retail investors.

Aditya Birla Sun Life AMC launched an IPO of over 3.88 crore equity shares which is an offer for sale by promoters Aditya Birla Capital and Sun Life AMC. The company plans to raise Rs 2,768 crore through the public issue and the price band for the offer has been fixed at Rs 695-712 per share.

It is the only non-bank promoted AMC within the top 5. "Despite this, in our opinion, the IPO pricing of Rs 712 per share (24.6X FY24 price-to-earnings (P/E) and 7.4 percent of current AUM) is at a significant undervaluation to that of HDFC AMC (35.4X FY24 P/E and 16.4 percent of AUM) and Nippon India AMC (28.9X FY24 P/E and 11.2 percent of AUM)," said Ventura Securities which recommended subscribe for long term gains.

The firm has given a price target of Rs 893 (31X FY24 P/E) based on FY24 DCF (discounted cash flow), implying a potential upside of 25% over the next 24 months. 

According to data from IPO Watch and IPO Central, Aditya Birla Sun Life AMC shares are currently trading on the grey market for Rs 757-762 per share, a premium of 6.3-7 percent over the upper price band of Rs 712 per share. Since 2011, it has been India's fourth largest asset management company (in terms of AUM). As of June 2021, AMC's total managed AUM was Rs 2,75,500 crore.