Aditya Birla Sun Life makes quiet debut, lists at par against issue price

The stock started trading at Rs 715, a 0.42 per cent premium to its issue price of Rs 712 per share on the NSE.

Aditya Birla Sun Life AMC has made a quiet debut on the bourses as shares of the company listed at par with its issue price of Rs 712 on the BSE on Monday. On the National Stock Exchange (NSE), the stock opened at Rs 715, a 0.42 per cent premium to its issue price.

Post listing, the stock touched a low of Rs 706.55 on the BSE and Rs 705 on the NSE, and a high of Rs 721 on both the exchanges. At 10:01 am; Aditya Birla Sun Life was trading at Rs 719, at 1 per cent premium to its issue price on the NSE and BSE. Around 1.9 million equity shares changed hands on both the exchanges.

Initial public offering (IPO) of Aditya Birla Sun Life AMC had received modest subscription of 5.2 times. The institutional investor portion of the issue was subscribed 10.4 times, high networth individual (HNI) portion was subscribed 4.4 times and retail portion was subscribed 3.22 times.

The IPO was entirely a secondary share sale by promoters Aditya Birla Capital (ABCL) and Sun Life AMC. The company expects that listing of the equity shares will enhance visibility and brand image and provide liquidity to shareholders and will also provide a public market for the equity shares in India.

Aditya Birla Sun Life AMC is the fourth largest asset management companies (AMCs) in India by quarterly average asset under management (QAAUM) since September 2011 and its also the largest non-bank affiliated AMC in India since March 2018.

The focus of the company is on consistent investment performance, extensive distribution network, brand, and superior customer service. The company managed total AUM of Rs 293642 crore (closing AUM) under its suite of mutual fund (excluding domestic fund of funds (FoFs)), portfolio management services, offshore and real estate offerings, and approximately 7.18 million investor folios (including domestic FoFs) end June 2021.

Aditya Birla Sun Life is focused on expansion in B-30 cities which has helped to grow retail customer acquisition and retention rates. As of June 30, 2021, MAAUM from B-30 cities was Rs 44,701 crore; market share of individual MAAUM from B-30 cities at 7.8 per cent. A large part of industry growth is expected to come from B-30 cities, and Aditya Birla Sun Life with an existing large presence & distribution capabilities in B-30 cities, remain well placed to attract customers.

Increased competition may lead to decrease in market share, underperformance of investment portfolio could impact AUM and concentration risk of investment portfolio to persist, are among key risk and concerns, analysts at ICICI Securities said in IPO note.

The extent to which the Coronavirus disease (COVID-19) may affect the 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 Aditya Birla Sun Life and any adverse change in its AUM may result in a decline in revenue and profit, HDFC Securities said in IPO note.

Underperformance of investment products in respect of which ABSL provide asset management services could lead to a loss of investors, reduction in AUM and adversely affect the results of operations and reputation. The 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, it added.