Aditya Birla Capital Approves IPO For Aditya Birla Sun Life AMC

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The board of Aditya Birla Capital Ltd. has approved an initial public offer of its asset management business, Aditya Birla Sun Life AMC Ltd., according to a filing with stock exchanges.

The IPO will be conducted as an offer for sale in which the two promoters will divest their shares. Aditya Birla Capital will sell 28.5 lakh equity shares and joint venture partner Sun Life (India) AMC Investments Inc. will sell 3.6 crore shares. A total 3.88 crore shares will offered for sale in the IPO, constituting up to 13.50% of Aditya Birla Sun Life AMC’s paid-up share capital of 28.80 crore equity shares of face value of Rs. 5 each.

Aditya Birla Sun Life AMC, according to Association of Mutual Funds in India, is the nation’s fourth-largest fund house with Rs 2.61 lakh crore in assets under management as of Dec. 31, 2020.

Aditya Birla Capital’s shares rose to their highest in over two years in March this year, when the board had accorded in-principle approval to explore the listing of its asset management business.

Kotak Institutional Equities, while initiating coverage on Aditya Birla Capital on March 15, mentioned that Aditya Birla Sun Life’s fund performance, diversified distribution mix and focus on business expansion in smaller cities will support its AUM growth.

Shares of Aditya Birla Capital ended 2.3% higher on Tuesday, as compared to the 1.4% gain seen on the benchmark Nifty 50 index. All 10 analysts that track the stock have a buy recommendation on it. Based on the 12-month Bloomberg consensus data, the stock has a return potential of 21.4%.

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