Aditya Birla Sun Life IPO is all set to launch on the 29th of September, 2021. Investor who are keen on investing in the same can know more about the Company as well as the details of the IPO below :
Business of Aditya Birla:
The Company had a market share of 8.3 Percent in the Country’s mutual fund Industry as of June 2021 with an AUM of Rs. 2.9 Lakh Crore. It has over 66,000 distributors covering more than 280 locations with a presence in tier-II and tier-III cities. Its total folio count (accounts) at the end of June 2021 was 7.2 million. The folio growth between March 2016 and March 2021 was 19 per cent annually compared with the 15 per cent growth in the total folio count of the industry. It has a strong retail franchise. The proportion of the systematic investment plan (SIP) increased to 41.7 per cent of its total equity assets in June from 25.7 Percent in March 2016.
Mutual fund is a highly regulated business with intense competition among the top five AMCs. Most of the top companies are affiliated with banks which gives them access to the banking network. While presence of banks helps AMCs secure new business, Aditya Birla Sun Life AMC has created a space for itself over 25 years without the support of a bank.
In the Past few years, mutual funds has emerged as a strong investment option due to low returns of fixed deposits. This augurs well for Aditya Birla Sun Life.
Financials:
The Company’s revenue fell to Rs.1,191 Crore in FY21 from Rs. 1,407 crore in FY19. However, net profit grew by Rs 526 Crore from Rs. 446 Crore during the Period due to lower expenses. The Company’s Return on net worth was superior at 30.9 percent in FY21 compared with 15-28 percent for the listed Peers.
Risks:
- The extent to which the coronavirus disease or any other pandemic may affect its business and operations in the future is uncertain and cannot be predicted.
- Revenue and profit are largely dependent on the value and composition of the AUM of the Schemes managed by the AMC and any adverse change in its AUM may result in a decline in its revenue and profit.
- Underperformance of Investment products in respect of which it provides asset management services could lead to a loss of investors, reduction in AUM and adversely affect its operations and reputation.
- Growth of AUM may be affected due to the unavailability of appropriate investment opportunities or if the company closes or discontinues some of its schemes or services.
- Credit risks related to the debt portfolio of its funds may expose its funds to losses, which may have an adverse effect on its business, operations, financial condition and cash flows.
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.
All about the Upcoming IPO:
- 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 up to 38,80,000 Equity Shares by the selling shareholder
- The IPO will open on September 29, 2021 and close on October 1, 2021.
- Aditya Birla Sun Life, in Consultation with merchant bankers, has fixed a price band at Rs.695 to Rs.712 per equity share for its public offer.
- The total fundraising comes to Rs. 2,768 Crores at the higher end of the price band.
- A bidder will be able to apply for the public issue in lots and one lot will comprise 20 shares of Aditya Birla AMC. A bidder can apply for minimum one lot and maximum 14 lots.As a bidder can apply for minimum one lot and maximum 14 lots, an investor can invest minimum Rs.14,240 (Rs. 712 x 20) and maximum Rs.1,99,360 (Rs. 712 x 20 x 14).
