The initial public offering (IPO) of ICICI Prudential AMC, the largest active mutual fund manager in the country, has seen a 53% subscription on the first day. The issue, which is entirely an offer for sale by UK-based partner Prudential Corp, has received bids for 1.85 crore shares against the 3.50 crore shares on offer.
The retail individual investors have subscribed to 20% of the 1.62 crore shares reserved for them, while non-institutional investors have applied for 34% of the 69.78 lakh shares allocated to their segment. Qualified institutional buyers have shown the strongest response, subscribing 1.29 times the 93.04 lakh shares earmarked for them.
The grey market premium (GMP) for ICICI Prudential AMC is currently around Rs 200, which is roughly 9.3% over the upper IPO price band of Rs 2,165. This indicates moderate listing expectations, with the estimated listing price projected to be around Rs 2,365.
ICICI Prudential AMC manages Rs 10.1 lakh crore of active mutual fund assets and commands a 13.3% market share. The company has a strong presence in the equity and hybrid categories, with a three-year CAGR of over 32% in both revenue and profit. Its alternates business is also growing rapidly, with a focus on portfolio management services, alternative investment funds, and offshore advisory.
Brokerages are broadly positive on the IPO, citing the company's strong market share, high profitability, and consistent growth. However, they also note that valuations are already rich, with the IPO pricing the company at around 40 times FY25 earnings at the upper band.
The key risks for the business include regulatory changes, increasing competition across AMCs and fintechs, pressure on fees due to the shift toward passive funds, and market volatility affecting flows and profitability. Despite these risks, analysts view the IPO as a long-term structural story, offering a clean play on the growth of the asset management industry.
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