Aditya Birla Sun Life (ABSL) AMC IPO : A Detailed Guide

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  • July 2, 2021
Aditya Birla Sun Life AMC IPO Launch Date & Price

Aditya Birla Group, a global conglomerate, is a member of the Fortune 500, with over 50% of its revenue flowing from 36 countries spanning from North and South America, Africa, and Asia. Aditya Birla Capital and Sun Life (India) AMC have agreed to sell a 13.5% stake in their asset management joint venture – Aditya Birla Sun Life AMC Limited through an IPO.

Aditya Birla Capital has approved the sale of up to 28,50,880 equity shares of the face value of ₹5 each held in ABSLAMC (Aditya Birla Sun Life AMC).

Aditya Birla Mutual Funds have been an interesting investment option to investors. Here’s all you need to know about Aditya Birla Sun Life IPO, what type of investors should invest in this IPO, Aditya Birla Sun Life IPO price and launch date, expectations from the IPO, and how to invest in IPOs using TradeSmart.

Aditya Birla Sun Life Company Details

Aditya Birla Sun Life Insurance Company Limited is a part of Aditya Birla Capital Ltd. It is a joint venture between the Aditya Birla Group and Sun Life Financial Inc., an international financial services organization in Canada with an ownership ratio of 51:49.

Category of Shareholders No. of Equity Shares % of Total Paid Up Equity Share Capital
Promoters Group (A)
Aditya Birla Capital Ltd 146,879,680 51%
Sun Life AMC 141,120,000 49%
Total (A) 287,999,680 100%

Aditya Birla Sun Life Insurance Company Limited offers various products across the customer’s life cycle, including wealth protection plans, health plans, children’s future plans, retirement, pension solutions, traditional term plans, and Unit Linked Insurance Plans (“ULIPs”).

As of the financial year 2021, Aditya Birla Sun Life Insurance Company Limited achieved the following feats:

  • Recorded a gross premium income of ₹97,752 million
  • Earned a total AUM of ₹526,151 million
  • Year-on-year growth of 22% in Gross Premium
  • Individual Business FYP rose as much to ₹20,760 million
  • The active customer base increased to more than 17 lakh

Aditya Birla shows some promising prospects, and the fundamentals of this company bolster these prospects. The Aditya Birla Sun Life IPO further helps the company to raise funds to achieve its goals seamlessly.

About Aditya Birla Capital

Belonging to the Fortune 500 company, Aditya Birla Capital is anchored by 140,000 employees belonging to 100 nationalities. With over seven decades of expertise, the business caters to various sectors such as metals, pulp, fiber, chemicals, textiles, carbon black, telecom, and cement.

About Sun Life Financial

Sun Life Financial is a leading international financial services organization that provides insurance, wealth, and asset management solutions. The company has operations in several markets, including Canada, the United Kingdom, the United States, Singapore, Ireland, Hong Kong, Philippines, Indonesia, Japan, India, Australia, China, Vietnam, Malaysia, and Bermuda.

About Aditya Birla Sun Life IPO

An IPO (Initial Public Offering) is a public offering in which shares of a company are sold to the investors. The Aditya Birla Sun Life IPO will be listed in both BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). Retail investors can also invest in this IPO which will be listed for public buying and institutional investors.

Aditya Birla Capital and Sun Life (India) AMC have agreed to sell a 13.5% stake from which Aditya Birla Capital will be a minority seller and shall sell up to 2.88 million shares. In contrast, Sun Life (India) AMC will sell most of its shares up to 36.03 million shares.

Aditya Birla Sun Life AMC filed for a draft red herring prospectus (DRHP) on 20th April 2021 with capital markets regulator SEBI. A DRHP is an offer document that includes information about its business operations, financials, promoters, stand in the industry, and competitors. The document also clarifies why the company wants to raise money from the public, how the company will utilize the money, and the risks involved by investing in it.

Company’s Performance

According to the Association of Mutual Funds in India (AMFI), Aditya Birla Sun Life AMC is India’s fourth-biggest AMC. As per the reports, Aditya Birla Sun Life AMC has delivered an annualized profit growth of 26% in the last decade with 15% annualized growth in AUM.

The fund house posted net profits of ₹147 crores for the quarter ended December. News reports stated that the current market capitalization of Aditya Birla Capital is ₹30,000 crore, and the company takes a huge portion of this value – ₹13,000 to ₹14,000 crores from the AMC business solely.

Aditya Birla Sun Life AMC manages 135 mutual fund schemes; several of these schemes have recorded superior performance than industry averages.

Expectations from the IPO

Some analysts estimate that the Aditya Birla Sun Life AMC IPO is expected to raise its valuation from ₹22,000 crores to ₹24,000 crores. Thus, the overall valuation of the firm will be around 34 times the FY23 earnings estimate.

Aditya Birla Sun Life IPO Launch Date

Aditya Birla Sun Life IPO launch date or open and close dates are yet to be announced for retail investors and institutional investors to participate in this IPO.

Aditya Birla Sun Life IPO Expected Share Price

The price for the Aditya Birla Sun Life IPO has not been announced yet. However, the company has declared ₹5 face value of each equity share on its way to be listed in stock exchanges.

What are Equity Shares and What Type of Investors can Invest in this IPO?

As mentioned above, Aditya Birla Capital and Sun Life (India) AMC will sell their equity shares through the IPO. When you buy equity shares of a company, you become a partial owner of it. You have the right to vote and claim profits. However, this isn’t restricted to just the profitable parts of a company. Since you are an investor and a partial owner of the company, whatever losses the company incurs, as an investor, you are liable to bear that loss too.

Hence, it can be said that equity shares are long-term financing instruments. Every market-linked investment carries some risk with it, and equity shares have high risk; however, investors may get high profits for it as well.

Such high-risk investment is preferable for the following investors:

  • Young investors: Many young investors may not have responsibilities like adults. Hence, such investors have surplus cash in their hands which they can invest in equity instruments.
  • Investors who are willing to take a risk: This goes without saying that since equity investments pose a high risk, it is most preferred for investors willing to take such risks.
  • Investors who want substantial profits: Even though equity investment poses a high risk, the risk-reward system lies in the same bandwidth. Equity investment may help investors to earn good profits.

Investors who are unwilling to take a high risk or are risk-averse, such as older adults planning for retirement, should think carefully before investing in equity shares.

How To Apply For Aditya Birla Sun Life IPO with TradeSmart

Using any supported UPI app, you can apply for an IPO using the TradeSmart platform. TradeSmart helps investors to place their IPO orders within minutes, thus making the procedure of applying for an IPO easy. Follow the steps given below to apply for an IPO successfully.

  • Log in to the back office (BOX). After logging in, you have to select the ‘IPO’ option under the’ Portfolio’ menu.
  • From the list of Current & Upcoming IPOs, choose ‘BID’ under the action section to apply for the IPO you wish to apply for.
  • Enter your UPI ID.
  • Make sure that your UPI ID is linked to your bank account.
  • Third-person bank accounts are not acceptable to apply for an IPO, i.e., the IPO application will be rejected whose bank account is different from the one who is applying for the IPO.
  • Place your bid on the IPO you wish to apply for and make a note of the below points.
  • While you’re placing the bids, only a quantity that is a multiple of the lot size is allowed.
  • Click on the checkbox next to ‘cutoff price’ if you want to apply at the highest price of the IPO. You can enter a different price that you want in the ‘Price’ field.
  • After completing all the steps mentioned above, click on the checkbox to confirm that you have read the DRHP and other related documents.
  • Click on the ‘Continue’ button.
  • Accept the mandate request on your UPI application.
  • You will receive an SMS confirmation of your application at the end of the day after applying for the IPO. You may also check the status of your bid in the ‘My Applications’ tab.

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