Aditya Birla Sun Life AMC IPO opens next week, Could you tell us about the structure of the IPO?
Birla Sun Life AMC has spent more than 26 years in the Indian mutual fund industry. All of us are happy now that we are taking the company to the listed space. Sun Life and together are offering 13.5% for sale (OFS). So, we will have 13.5% in the listed space and then the balance as per the regulation, will be divested over the next three years. This is the current structure. The pricing has been done on the basis of the feedback from various investors and the current market condition. The price band of the initial share sale has been fixed at Rs 695 to 712 per share. Fixing the valuation at the upper end of Rs 712, Rs 27,500 crore is the valuation that has been kept for the AMC.
How did the management go about while doing the valuation exercise?
There are already a lot of listed players in the AMC space. Given that Aditya Birla Sun Life Mutual Fund has been growing its size as well as increasing the customer base across the country, being part of the listed space was important. We as an AMC have been using the cash for rewarding investors, rather shareholders, on a regular basis in the form of dividend. So the pricing had to be reasonable and at the same time, it had to encourage the long-term investors to come in. In a comparable valuation of the AMC industry, it has been kept at a reasonable price and that is something which the shareholders broadly have agreed taking into account the interest of on boarding investors into our AMC.
How has the business been doing lately especially as these are the best of times for the industry and especially for your AMC?
The AMC industry is on a high growth path and given the under penetration in the industry, there is still a long way to go in respect of the increase in AUM and onboarding of customers in equity schemes. At the same time, investing in SIPs has become the way of life for most of the investors. Given the deep under penetration, the AMC industry will be on a high growth path. The competitive landscape is also changing. I think the positioning of the AMC industry to capture the longer term opportunity that it provides in India is very important. We remain committed in the space as one of the long term players.
