Aditya Birla Sun Life AMC IPO: The Rs 2,768 crore IPO of Aditya Birla Sun Life AMC, the AMC arm of Aditya Birla Group, will open for subscription tomorrow i.e. on September 29. Aditya Birla Capital Limited and Sun Life AMC together are offering 3.88 crore equity shares, which is 13.50% of the post-offer paid-up equity share capital of the company in the fixed price band of Rs 695-712 per share. Under this, Aditya Birla Capital will sell 28.51 lakh and Sun Life AMC 3.6 crore equity shares. The IPO of Aditya Birla Sun Life AMC will be open for subscription this week on Friday, October 1. It is the largest non-banking affiliated AMC in the country.
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dropped gray market premium
Before the IPO, the share of Aditya Birla Sun Life AMC is trading at a premium of Rs 30-40 per share in the unlisted sector. This has come down from a premium of Rs 50 per share at the end of last week. According to Manan Doshi, co-founder of UnlistedArena, a firm dealing in unlisted and pre-IPO stocks, the company’s performance is better. He said that the chances of substantial listing gains from the IPO are slim but long-term investors can subscribe to the IPO of Aditya Birla Sun Life AMC.
14,240 will have to be invested for one lot
Investors can bid for the IPO in the price band of Rs 695 to 712 per share, followed by bidding in lots of 20 shares. According to the upper price band of Rs 712, investors will have to invest Rs 14,240 for at least one lot. No new shares will be issued under IPO. This issue is purely an offer for sale and under this the existing shareholders will sell the shares.
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Post the issue, the promoter group’s stake in the company will come down to 86.5% from the current 100%, while the public shareholding will increase to 13.5%. Half of the IPO is reserved for Qualified Institutional Buyers (QIBs), while 35% is reserved for retail investors and 15% for non-institutional investors (NIIs). Aditya Birla Sun Life AMC has managed assets of Rs 2.94 lakh crore as on June 30, 2021.
should you buy it?
Analysts at Marwari Financial Services said, “Considering TTM adjusted EPS of Rs 20.27 on a post-issue basis, the company is going to be listed at P/E of 35.13 with a market cap of Rs 20,505 crore. While its counterparts HDFC AMC and Nippon Life are trading at P/E of 49.99 and 38.61 respectively. Analysts have given ‘Subscribe’ rating to this IPO. He says that the company is India’s largest non-banking affiliated asset manager. Moreover, the company is available at a fair valuation as compared to its counterparts. One of the risks associated with the company is increased competition, which can lead to poor performance of the investment portfolio as well as loss of market share, which can impact AUM.
(Article: Kshitij Bhargava)
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