Fund house Aditya Birla Sun Life AMC has come up with its public issue to raise around Rs2,770 crore, which opens today and closes on October 1. The three-day initial share sale's price band has been fixed at Rs695-712 per share. Ahead of its IPO, the company on Tuesday collected Rs789 crore from anchor investors.

Aditya Birla AMC's initial public offering (IPO) is entirely an offer for sale, wherein two promoters, Aditya Birla Capital and Sun Life (India) AMC Investments, will divest their stake in the asset management firm. 

As per market observers, Aditya Birla AMC shares are available at a premium (GMP) of Rs27 in the grey market today. The grey market is an unofficial platform, wherein trading starts after the announcement of IPO price band till the listing of IPO shares.

The IPO of up to 3.88 crore equity shares comprises an offer for sale of up to 28.51 lakh equity shares by Aditya Birla Capital and up to 3.6 crore equity shares by Sun Life AMC.

Anand Rathi has a ‘Subscribe’ rating on the IPO given that the company is the largest non-bank affiliated AMC and among the four largest AMCs in India with well recognized promoters, growing individual investor customer base, diverse product portfolio with high RoNW of 30.87% in FY21.

Aditya Birla Sun Life AMC, the investment manager of Aditya Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the Sun Life Financial Inc of Canada.

“With supportive government policies, financialization of household savings, increasing penetration in the B30 cities, the macros of the domestic mutual fund industry are positive and provide huge scope for growth and development.. Moreover, based on FY24E earnings, the stock is demanding a P/E valuation of 29.4x, which seems to be attractive for a company with a RoE excess of 25%. Thus considering the above observations, we assign a 'Subscribe' rating for the issue," Choice Broking said in an IPO note.

Aditya Birla Sunlife MF, the fourth largest fund house, had an average assets under management of Rs2.93 lakh crore as of June quarter. At present, it manages 118 schemes.

Another brokerage Angel Broking has also recommended Subscribe to the IPO given the discount to Nippon AMC and strong growth prospects of the AMC due to a buoyant capital market.

Kotak Mahindra Capital Company, BofA Securities, Citigroup Global Markets India, Axis Capital, HDFC Bank, ICICI Securities, IIFL Securities, JM Financial, Motilal Oswal Investment Advisors , SBI Capital Markets and YES Securities (India) are the merchant bankers to the issue.