Please refer to important disclosures at the end of this report
1
Aditya Birla Sun Life AMC Limited (“ABSLAMC”) is ranked as the largest non-bank
affiliated AMC in India by Quarterly Average Assets Under Management
(“QAAUM”) since March 31, 2018, and among the four largest AMCs in India.
Company managed total AUM of ₹2,93,642 crores under the suite of mutual fund
(excluding our domestic FoFs), portfolio management services, offshore and real
estate offerings, as of June 30, 2021. It established a geographically diversified
Pan-India distribution presence covering 284 locations spread over 27 states and
six union territories.
Positives: (a) Largest Non-Bank Affiliated Asset Manager in India (b) Well-
Recognized Brand with Experienced Promoters (c) Growing Individual Investor
Customer Base Driven by Strong Systematic Flows and B-30 Penetration (d) Diverse
Product Portfolio with Fund Performance supported by Research Driven Investment
Philosophy.
Investment concerns: (a) The effect of pandemic is uncertain and unpredictable to
the business. (b) Any adverse change in AUM may result in a decline in overall
revenue and profit. (c) Underperformance of investment products could lead to loss
of investors and subsequently loss of AUM & adverse impact on operation. (d)
Credit risks related to the debt portfolio of managed funds may expose the funds
to losses.
Outlook & Valuation: Aditya Birla AMC has witnessed a steady growth in AUM
since 2016 and has also been constantly increasing the share of Individual AUM
within the mix. Moreover, the share of high margin Equity AUM has normalized to
36.5% of AUM in Q1FY2022 as compared to 30.5% of AUM at the end of
FY2020. At the higher end of the price band the AMC will be trading at
Market/AUM of 7.3xQ1FY22 Avg. AUM which is at a discount to Nippon Life AMC
and at a similar level to that of UTI AMC. Given the discount to Nippon AMC and
strong growth prospects of the AMC due to a buoyant capital market we would
recommend to SUBSCRIBE to the IPO.
Key Financials
Y/E March (` cr)
FY2019
FY2020
FY2021
Net Sales
1,406.1
1,233.8
1,191.0
% chg
-
-12.2
-3.5
Net Profit
446.8
494.4
526.3
% chg
-
10.7
6.4
EBITDA (%)
48.6
56.9
60.8
EPS (Rs)
15.5
17.2
18.3
P/E (x)
45.9
41.5
39.0
P/BV (x)
16.8
15.6
12.0
ROE (%)
36.6
37.5
30.9
ROCE (%)
48.3
46.7
37.9
Market Cap/Avg. AUM (%)
8.0
9.5
7.6
Source: Company, Angel Research.
Note: Valuation ratios at upper price band.
SUBSCRIBE
Issue Open: Sep 29, 2021
Issue Close: Oct 01, 2021
Offer for Sale: `2768.26 cr
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Promoters 86.5%
Others 13.5%
Fresh issue: `0 cr
Issue Details
Face Value: `5
Present Eq. Paid up Capital: `144 cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: `144cr
Issue size (amount): `2,768.26 cr
Price Band: `695-712
Lot Size: 20 shares and in multiple thereafter
Post-issue mkt. cap: * `20,016 cr - ** `20,506 cr
Promoters holding Pre-Issue: 100%
Promoters holding Post-Issue: 86.5%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Aditya Birla Sun Life AMC Ltd
Aditya Birla AMC|IPO Note
September 28, 2021
Aditya Birla AMC | IPO Note
Sep 28, 2021
2
Company background
Company incorporated in 1994, Aditya Birla Sun Life AMC is set up as a joint
venture between ABCL and Sun Life AMC. Company managed total AUM of
₹2,93,642 crores under the suite of mutual fund (excluding our domestic FoFs),
portfolio management services, offshore and real estate offerings, as of June 30,
2021. The company managed 135 schemes comprising 35 equity, 93 debt, 2
liquid schemes, 5 ETFs, and 6 domestics FoFs as of December 31, 2020.
Issue details
The issue comprises of OFS of upto `2,768.26 crore and no Fresh issue
Pre and post IPO shareholding pattern
No of shares
(Pre-issue)
%
(Post-issue)
%
Promoter
288,000,000
100.0
249,120,000
86.5
Public
0
0.0
38,880,000
13.5
Total
288,000,000
100.0
288,000,000
100.0
Source: Company, Angel Research & RHP.
Objectives of the Offer
Carry out the Offer for Sale of up to 38,880,000 Equity Shares by the
Selling Shareholders.
Achieve the benefits of listing the Equity Shares on the Stock Exchanges
and General corporate purposes.
Key Management Personnel
Kumar Mangalam Birla is the Non-Executive Chairman of the Company. He is
also the chairman of the Aditya Birla group and the chairman on the boards of key
group companies in India and globally.
Ajay Srinivasan is a Non-Executive Director of the Company with over three
decades of experience in financial services and has been on the Board of the
Company since August 2, 2007. He has experience in leadership positions
with financial institutions having operations in India and internationally such as
Prudential ICICI AMC and Prudential Corporation Asia.
Sandeep Asthana is a Non-Executive Director of the Company and has been
on the Board of our Company since April 27, 2011. He holds a bachelor’s
degree in chemical engineering from Indian Institute of Technology. His
experience covers leadership roles in Reinsurance Group of America (RGA Re),
Unit Trust of India (UTI) and Zurich Risk Management Services (India) Private
Limited.
A Balasubramanian is the Managing Director and Chief Executive Officer of
the Company and has been associated as an employee of the Company since
1994. He has completed advanced management programs from Indian
Institute of Management, Bangalore and Harvard Business School. He also
holds a bachelor’s degree in science (mathematics) and a master’s degree in
business administration from GlobalNxt University.
Aditya Birla AMC | IPO Note
Sep 28, 2021
3
Exhibit 1: Consolidated Profit & Loss Statement
Y/E March (` cr)
FY2019
FY2020
FY2021
Q1FY2022
Total Revenue From Operation
1,406.1
1,233.8
1,191.0
333.2
% chg
-
-12.2
-3.5
29.9
Total Expenditure
723.3
532.1
467.0
120.0
Fees and commission expense
143.5
75.0
47.0
6.2
Employee benefit expense
277.5
242.0
240.7
68.9
Other expense
302.3
215.0
179.2
44.9
EBITDA
682.7
701.8
724.1
213.2
% chg
-
2.8
3.2
55.6
(% of Net Sales)
48.6
56.9
60.8
64.0
Depreciation& Amortisation
32.4
36.5
37.4
9.0
EBIT
650.3
665.2
686.6
204.2
% chg
-
2.3
3.2
60.2
(% of Net Sales)
46.3
53.9
57.7
61.3
Finance costs
5.7
5.4
5.6
1.3
Other income
1.2
0.9
14.8
3.0
(% of Sales)
0.1
0.1
1.2
0.9
Recurring PBT
645.8
660.7
695.9
205.9
% chg
-
2.3
5.3
58.2
Exceptional item
-
-
-
-
Tax
199.0
166.3
169.6
50.9
PAT (reported)
446.8
494.4
526.3
154.9
% chg
-
10.7
6.4
59.2
(% of Net Sales)
31.8
40.1
44.2
46.5
Basic & Fully Diluted EPS (Rs)
15.5
17.2
18.3
-
Source: Company, Angel Research
Aditya Birla AMC | IPO Note
Sep 28, 2021
4
Exhibit 2: Consolidated Balance Sheet
Y/E March (` cr)
FY2019
FY2020
FY2021
Q1FY2022
SOURCES OF FUNDS
Equity Share Capital
18.0
18.0
18.0
144.0
Other equity (Retained Earning)
1,202.6
1,298.9
1,686.6
1,658.2
Shareholders’ Funds
1,220.6
1,316.9
1,704.6
1,802.2
Total Loans
-
-
-
-
Other liabilities
125.5
109.0
105.9
102.2
Total Liabilities
1,346.0
1,425.9
1,810.5
1,904.3
APPLICATION OF FUNDS
Property, plant and equipment
20.5
19.1
12.2
10.5
Right of use assets
64.6
54.7
51.6
49.1
Intangible assets under development
1.1
0.8
1.0
0.8
Other intangible assets
9.5
12.4
13.3
12.4
Current Assets
1,246.7
1,391.2
1,850.2
1,949.3
Cash and cash equivalents
38.2
46.6
56.5
52.0
Bank balances other than (a) above
0.3
0.3
0.3
0.3
Trade receivables
25.7
40.5
31.0
25.7
Loans
0.1
0.1
0.0
0.0
Investments
1,138.1
1,263.4
1,726.3
1,852.1
Other financial assets
28.5
12.9
19.2
12.7
Current tax assets (net)
16.0
27.4
16.9
6.4
Current Liability
152.4
146.1
174.0
181.6
Net Current Assets
1,094.3
1,245.1
1,676.1
1,767.7
Other Non-Current Asset
156.0
93.7
56.3
63.8
Total Assets
1,346.0
1,425.9
1,810.5
1,904.3
Source: Company, Angel Research
Aditya Birla AMC | IPO Note
Sep 28, 2021
5
Exhibit 3: Consolidated Cash flows
Y/E March (` cr)
FY2019
FY2020
FY2021
Q1FY2022
Operating profit
600.7
629.9
601.9
196.0
Net changes in working capital
-57.1
37.4
61.4
8.7
Cash generated from operations
543.6
667.4
663.2
204.8
Direct taxes paid (net of refunds)
-228.2
-170.4
-151.0
-38.2
Net cash flow Operating
315.3
497.0
512.3
166.6
Purchase of Investments
-1,885.4
-1,053.6
-2,039.7
-604.7
Sale of Investments
1,967.3
1,002.5
1,702.0
509.0
Others
-19.5
-15.0
-2.1
1.4
Cash Flow from Investing
62.4
-66.1
-339.8
-94.3
Final / Interim Dividend Paid
-360.6
-397.8
-140.0
-70.6
Lease Liability - Interest portion
-5.7
-5.4
-5.6
-1.3
Lease Liability - Principal portion
-17.3
-19.3
-16.9
-4.9
Cash Flow from Financing
-383.6
-422.5
-162.5
-76.8
Inc./(Dec.) in Cash
-5.8
8.4
9.9
-4.5
Opening Cash balances
44.0
38.2
46.6
56.5
Closing Cash balances
38.2
46.6
56.5
52.0
Source: Company, Angel Research
Key Ratios
Y/E March
FY2019
FY2020
FY2021
Valuation Ratio (x)
P/E (on FDEPS)
45.9
41.5
39.0
P/CEPS
42.8
38.6
36.4
P/BV
16.8
15.6
12.0
Market Cap/Avg. AUM (%)
8.0
9.5
7.6
Per Share Data (Rs)
EPS (Basic)
15.5
17.2
18.3
EPS (fully diluted)
15.5
17.2
18.3
Cash EPS
16.6
18.4
19.6
Book Value
42.4
45.7
59.2
Returns (%)
ROE
36.6
37.5
30.9
ROCE
48.3
46.7
37.9
Other Ratios (x)
Revenue/Avg. AUM (%)
0.56
0.52
0.49
PAT/Avg. AUM (%)
0.18
0.21
0.22
Source: Company, Angel Research
Aditya Birla AMC | IPO Note
Sep 28, 2021
6
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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