PL Capital starts with 'Buy' on ICICI Pru AMC ahead of listing; target here

Analysts at PL Capital expect ICICI Prudential AMC's equity AAuM to grow at a CAGR that is 2.5 per cent higher than the industry average over FY25-28

Domestic brokerage PL Capital has initiated coverage on ICICI Prudential Asset Management Company (AMC) with a 'Buy' rating ahead of its listing on Dalal Street. The brokerage is optimistic about the company's business prospects, given its strong performance, which is driving the highest net equity flow market share (17.5 per cent in M8FY26) among AMCs, and its superior equity yields of 67 basis points (bps) due to the lowest distributor payout. Additionally, it accounts for 73.7 per cent of mutual fund (MF) sales by ICICI Bank due to the latter’s closed architecture and a higher share of non-MF revenue at 9.2 per cent among peers.

 

Analysts at PL Capital expect the company's equity average assets under management (AAuM) to grow at a compound annual growth rate (CAGR) that is 2.5 per cent higher than the industry average over FY25-28. This is expected to drive a core profit after tax (PAT) CAGR of 18.5 per cent over the same period.

 

ICICI Prudential AMC is scheduled for listing on the bourses, NSE and BSE, on Friday, December 19, 2025. The initial public offering comprises an offer for sale of 48.9 million equity shares worth up to ₹10,602.65 crore by UK-based Prudential Corporation Holdings. The issue closed for subscription on December 16 after being subscribed around 39 times. It was priced in the range of ₹2,061 to ₹2,165 per share.

 

At the upper price band of ₹2,165, the stock is valued at around 27 times the estimated core earnings per share (EPS) for September 2027. This implies a valuation discount of about 17 per cent compared with HDFC Asset Management Company (HDFCAMC) and around 16 per cent against Nippon Asset Management (NAM), both of which are trading at roughly 32 times their respective earnings.

 

According to the brokerage, ICICI Prudential could eventually command a premium to HDFC AMC, supported by better distribution and diversification, while having similar profitability. It has valued the stock at 38 times its estimated core EPS for September 2027, arriving at a target price of ₹3,000.  CATCH STOCK MARKET LIVE UPDATES TODAY

Here's why PL Capital is bullish on ICICI Prudential AMC IPO:

Consistent strong performance: The company has shown the best performance in the 1-year bucket, while being ranked consistently among the top three in the 3-year bucket since February 2022. Its net equity flow market in FY25 and M8FY26 was highest among AMCs at 15.2 per cent and 17.5 per cent, respectively, compared to the stock market share of 13.2 per cent and 13.8 per cent, respectively. Additionally, the company's performance is more risk-efficient than peers due to lower concentration risk and SMID exposure. 

 

Strong parentage supports higher yields: Analysts noted that despite having the largest active equity base, ICICI Prudential AMC delivers superior equity yields of 67 bps in FY25, compared with 62.5 bps for HDFC AMC, 57.5 bps for SBI Mutual Fund, and 61.1 bps for Nippon Asset Management. This is aided by a higher banca share with strategic reliance on ICICI Bank, higher direct mix, strong pedigree and consistent but superior risk-efficient performance, the largest number of equity schemes (43), and lower AUM size that allows higher TER. Debt yield is highest at 32.6 bps, led by better 3-year performance.

 

Strong parentage backs distribution: "ICICI Bank provides access to a vast distribution network of 7,246 branches and integration with the bank’s digital platforms. Bank’s closed architecture leads to ICICI AMC accounting for 73.7 per cent of overall MF sales by the bank and 70 per cent of ICICI Bank’s MF-related AAuM," the brokerage said. It has a large sales team of 2,911 as of September 2025.

 

Diversified revenue streams: ICICI AMC has a higher share of non-MF revenue. Its alternate business consists of PMS, AIF and advisory with a combined QAAuM of ₹729.3 billion as of September 2025. Excluding PMS/AIF-related expenses, contribution to revenue for FY25 is better than peers at 9.2 per cent. "Driven by market share gains, we expect a higher equity AAuM CAGR of 22.7 per cent in FY25-28E vs 20 per cent for the industry. This should result in a core PAT CAGR of 18.5 per cent over FY25-28E, which would be the highest among listed peers," PL Capital said. 

(Disclaimer: Target price and stock outlook has been suggested by PL Capital. Views expressed are their own.)