The bidding for the IPO of Aditya Birla Sun Life AMC closed on Friday. The IPO has been subscribed nearly 5.25 times. By category, retail investors subscribed to the issue 3.24 times for their share. The issue was subscribed 10.36 times in the QIB category. While the NII category was subscribed 4.39 times. According to market observers, the IPO was purely an offer for sale (OFS), which may not have gone down well with the investors. As a result, the number of bids for this IPO issue remained “below expected”. However, the financial position of the company is very promising.
How much is the Gray Market Premium (GMP) going?
Market Observers reported that Aditya Birla AMC shares were trading at a premium of Rs 20 in the gray market. This is Rs 4 more than the premium price of Rs 16 a day earlier. Observers said that Aditya Birla AMC’s gray market premium has been in the range of Rs 15 to 20 for the last few days. This may be due to the “slow” response from investors.
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What does this GMP mean?
Market Observers said the gray market premium (GMP) of Aditya Birla AMC simply means that the gray market is expecting a listing profit of Rs 20 from the IPO. This means that the IPO can be listed at around Rs 732 (712 + 20). This is almost 3% higher than the fixed amount for its upper price band of 712.
What is the opinion of the expert?
Speaking on the fundamentals aspect of Aditya Birla AMC for the long-term, Saurabh Joshi, Research Analyst, Marwari Shares and Finance Ltd. said, “Given the TTM adjusted EPS of Rs 20.27 on a post-issue basis, the company has a P/E of 35.13. But going to be listed with a market cap of Rs 2,05,056 crore.”
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He further added, “In comparison, its rivals like HDFC AMC and Nippon Life are trading at P/E of Rs 49.99 and Rs 38.61 respectively. Aditya Birla AMC is the country’s largest non-bank AMC. It has With a very diversified portfolio and a pan-India presence, it is also available at a very reasonable price compared to its peers.”
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