Shares of Aditya Birla Sun Life (ABSL) AMC Ltd on Monday closed lower on debut after its initial public offering (IPO) subscribed more than 5.24 times last month.
The stock opened at ₹712 on the Bombay Stock Exchange and touched a high and a low of ₹722.90 and ₹695.30, respectively. At closing, the scrip settled at ₹699.65, down 1.73% from its issue price of ₹712.
At the upper end of the IPO price band, Aditya Birla Sun Life AMC is offered at P/E (price-to-earnings) ratio of 39x its FY21 earnings.
ABSL AMC stands to benefit from strong industry prospects as it has a diversified product portfolio and also offers customized solutions to meet financial goals, according to Religare Broking. It has a well-recognized and experienced promoter group (Aditya Birla and Sun Life), which will help build customer trust and improve SIP inflows, said analysts at Religare Broking Ltd.
The company plans to improve its customer base and gain market share by developing more investment offerings, strengthening relationships with distributors, increasing geographical presence, and improving digital platform technology. The company has seen consistent improvement in assets under management share and the overall financial performance has been healthy, Religare Broking said.
The IPO, which is a pure offer for sale by joint venture partners Aditya Birla Capital Ltd and Sun Life (India) AMC Investments Inc, will be priced at ₹695-712 per share. The two shareholders are selling a total of 38.87 million shares. The offer for sale comprises the sale of up to 2.85 million shares by Aditya Birla Capital and up to 36.02 million shares by Sun Life.
The share sale will result in an equity dilution of 13.5% for existing shareholders.
As of 30 June, the mutual fund company managed 118 schemes comprising 37 equity schemes, including diversified, tax-saving, hybrid and sector schemes, 68 debt schemes, including ultra short-duration, short-duration and fixed-maturity schemes, two liquid schemes, five exchange-traded funds, and six domestic fund of funds.
