RHP analysis: ICICI Prudential AMC flags these top 10 risks ahead of IPO

The much-awaited initial public offering (IPO) of ICICI Prudential Asset Management Company is set to open for public subscription on Friday, December 12. The company seeks to raise ₹10,602.65 crore through the maiden share sale, making it among the largest public offerings of the year.  Notably, the offering comprises an entirely Offer for Sale (OFS), with promoter Prudential Corporation Holdings divesting up to 48,972,994 equity shares of the company.

 

The public issue, which will remain open for subscription until Tuesday, December 16, 2025, will be offered at a price band of ₹2,061 to ₹2,165 per share, with a lot size of 6 shares.

 

Meanwhile, early trends in the grey market indicate favorable sentiment for the public offering. Sources tracking unofficial market activity revealed that the unlisted shares of the company were exchanging hands at ₹2,289 per share. This translates to a grey market premium of ₹124 per share, or 5.73 per cent over the upper end of the IPO price of ₹2,165 per share.

 

That said, here are the top ten risk factors relating to ICICI Prudential Asset Management Company as outlined in its Red Herring Prospectus (RHP):

 

Factors beyond the company’s control, such as adverse market or economic conditions, could affect its business by reducing the value of assets under management, resulting in lower management fees from mutual fund operations, portfolio management services, alternative investment funds, or advisory services. This, the comapny said, may adversely affect business, results of operations, financial condition, and cash flows.

 

If the company’s investment products underperform, assets under management—including those under portfolio management services, alternative investment funds, and advisory mandates—could decline and adversely affect its business, results of operations, financial condition, and cash flows.

 

The company’s historical performance is not indicative of future growth, and failure to manage growth or successfully implement growth strategies may adversely impact business, results of operations, financial condition, and cash flows.  ALSO READ | Park Medi World IPO: Analysts split on prospects; should you apply? 

Competition from existing and new market participants offering investment products could reduce the company’s growth, market share, or put downward pressure on fees, adversely affecting business, results of operations, financial condition, and cash flows.

 

The company depends on the brand strength and reputation of its promoters, as well as other ICICI Group and Prudential Group entities. Any harm to the reputation of these entities could adversely impact business, results of operations, financial condition, and cash flows.

 

The company’s investment management, portfolio management, investment advisory agreements, and other business commitments may generally be terminated by counterparties, making future customers and revenues unpredictable.

 

The company regularly introduces new products, but there is no assurance that these new products will be scalable or profitable in the future.

 

The company operates in a highly regulated industry, and any breach of applicable regulations may lead to adverse regulatory action. Additionally, changing laws, rules, and regulations, as well as legal uncertainties in India, may adversely affect business, results of operations, financial condition, and cash flows.

 

The company depends on third-party service providers, including distributors, for its operations. Any deficiency or interruption in their services could adversely affect operations and reputation."

 

The company faces threats of online fraud and cyber-attacks aimed at disrupting services or stealing sensitive internal or investor data. Such incidents may adversely impact business, results of operations, financial condition, and cash flows.