On August 04, 2000, Aditya Birla Sun Life AMC was a joint venture between Sun Life AMC and Aditya Birla Capital Limited. It is a life insurance subsidiary of ABCL. The company started its functioning on January 17, 2001. Aditya Birla Sun Life AMC offers a diversified service. It includes retirement and pension solutions, children’s plans, traditional term plans, wealth protection plans, health plans, and ULIPs.
The company managed a total Asset Under Management of ₹2,736.43 Billion. It was managed under mutual fund, real estate offerings, and portfolio management services. The company managed 135 mutual fund schemes. It comprises 35 equity funds, 5 ETFs, 93 debt funds, 6 domestics FoFs, and 2 liquid schemes as per data available till December 31, 2020. The AMC’s Monthly average AUM from FII’s and DIIs was ₹1,412.43 Billion till December 31, 2020.
OBJECTS OF THE IPO ISSUE:
- Prepayment of all or significant part of the loan on the company on a consolidated basis.
- To accomplish corporate targets
BASIS OF THE IPO ISSUE:
- Objective of being India’s greatest non-banking related Asset Under Management company.
- A notable and legitimate brand with experienced and well-renowned Promoters.
- A fast-growing customer base of individual financial investors, powered by significant methodical exchanges and B-30 infiltration.
- An expanded item range with exceptional fund performance sponsored by an exploration based on proper risk management and investment strategy and philosophy.
- A shifted appropriation network that traverses throughout India
- A multi-award-winning establishment drove by a dependable and expert administration and financial team.
IPO DETAILS:
Aditya Birla Sun Life Asset management company has filed its DRHP to SEBI to raise funds through an IPO. The IPO includes a 13.5% equity as an Offer for Sale in their asset management joint venture. Aditya Birla Capital owns 51% of the company, while Sun Life AMC has a 49% stake. The IPO is of up to 3.89 crore equity shares. It comprises an OFS of up to 28.51 lakh equity shares by Aditya Birla Capital and 3.6 crore equity shares by Sun Life AMC. The IPO offer also includes a reservation of 1,944,000 equity shares. This reservation is for a subscription for Aditya Birla Capital Limited existing shareholders.
| IPO Open | 29 September 2021 |
| IPO Close | 01 October 2021 |
| Issue Type | Book Building Type |
| IPO Size | Approx. ₹2768 Crores |
| Issue Size | 38.91 million equity shares |
| Fresh Issue | No Fresh Issue |
| Offer for Sale | Approx. ₹2768 Crores |
| OFS Size | 38.91 million equity shares |
| Face Value | ₹5/ Equity Share |
| Price Band | ₹695 – ₹712 Per Share |
| Listing on | BSE & NSE |
| Retail Portion | 35% |
| QIB Portion | 50% |
| NII Portion | 15% |
| Share Holder Quota | 5% |
| Minimum Lot Size | Minimum 20 Shares for1 lot |
| Minimum Amount | ₹14,240 for 1 lot |
| Maximum Lot Size | Maximum 280 Shares for 14 lot |
| Maximum Amount | ₹199,360 for 14 lot |
| Price Band Announcement: | 23 September 2021 |
| Anchor Investors Allotment: | 28 September 2021 |
| Basis of Allotment: | 06 October 2021 |
| Refunds: | 07 October 2021 |
| The Credit to Demat Account: | 08 October 2021 |
| IPO Listing Date: | 11 October 2021 |
PROMOTERS:
- Aditya Birla Capital Limited
- Sun Life (India) AMC Investments Inc
| Pre-Issue Share Holding | 100% |
| Post Issue Share Holding |
COMPETITIVE STRENGTHS AND GROWTH ASPECTS:
- Biggest Non-bank Affiliated Asset Management organization of India.
- All around perceived and entrusted brand with experienced promoter group.
- Aditya Birla Sun Life AMC has been Quickly developing its client base.
- They have a diversified portfolio of services and inventive plans through equity, balanced, debt and managed assets class, solid venture achievement with more than 7 million client folios.
- The organization has Digitized and Automated a few parts of its activities, remembering for connection to Client Onboarding, Online Instalments, and different exchanges. It also includes Fund Performance and Fund Management, Bookkeeping, Client Support, and Data Analysis.
- The business continually attempts to make the mutual funds more interesting to a more extensive scope of investors and counselors in India.
- Smart solutions, user-friendly services, and conveniences that improve the mutual fund’s activities with digitization.
- Aditya Birla Sun Life AMC has a set upmarket position in the life insurance sector with a sound and strong portfolio and sufficient capital position.
- Solid linkage with its parent company Aditya Birla Group is reflected in their operations.
- The organization keeps on profiting from its broad industry ability, which it has obtained over its functional history of twenty years.
- The world is currently driven by awareness and necessity for life insurance, health insurance, term insurance after Covid-19.
- The premiums of this insurance coverage have also increased significantly.
- The organization has made arrangements for the unsatisfactory and non-performing assets and resources on its books. Aditya Birla Sun Life AMC doesn’t expect any further material provisioning prerequisite at this point.
WEAKNESS AND THREATS
- The organization’s qualities are offset by high dependence on the direct channel for sourcing business.
- The company has normal profitability only. The AMC will face some challenges in the improvement of its profitability amid rising competition.
- The increase in the Obligation under Claims affected their endorsing execution and capital and positions of solvency.
- The AMC marked a decrease in its average solvency ratio in 2021.
- The company needs to follows all the guidelines and regulations been set up by the Government of India and the Insurance Policy.
- With numerous new players over the previous decade, competition in the insurance sector has expanded multifold. Top 2-3 players have had a bigger portion of the overall industry, though others consistently focus on diversifying and improving their product portfolio. It seeks a challenge for the company to generate adequate profits and be in sync with the growth in the industry.
- Factor to higher working costs is a generally lower renewal premium in the absolute premium procured during any financial year.
FINANCIAL TRENDS:
- At its beginning, the AMC got Rs 967 crore as capital from Aditya Birla Capital Limited. From that point forward, the organization’s net worth has been upheld by its inner accumulations.
- On March 31, 2021, the total assets of the company were Rs 2,343 crore.
- The company’s solvency ratio has been about 1.90 in the last three financial years, but now it has dropped to 1.80.
- In March 2021, the company’s solvency ratio was 1.80. It factors in the Rs 150 crore subjected obligation brought up in January 2021.
- The ABSLI-AMC is the eighth-biggest private in the life insurance sector. The market share of the company is around 1.6%.
- In FY21, the organization’s premium developed at 22%, contrasted with 7% in the past few years. This development was noticed in new business premiums, which grew by 25%, and renewal business premiums which grew by 20%.
- ABSLI-AMC’s Pre-tax returns on complete resources are around 0.3%, and returns on total assets are near to 10% in the last three financial years.
- The Gross Value of New Business Margins has been higher than their peers. It is at about 35%, showing the more prominent capability of new business.
- In March 2021, 36.4% of all their investments were in Government Securities. 75.2% of their total portfolio was in the debt securities. Among which 99% were rated AA and above.
- Their AUM for the domestic market is nearly Rs.2.7 lakh crore as of March 2021.
- The organization began moving from a profoundly ULIP-centred book in 2016 to customary items as a business technique. The modified item procedure involving more than 40% of non-standard fragments required 2-3 years to stabilize. The organization’s growth stayed at 3-7%, against an industry development of 10-14% over a similar period.
- After reaching stability, the organization developed at 27% in FY2019. Notwithstanding, the momentum was upset by the COVID19 pandemic.
- During the first nine months of FY21, the company’s market share improved to 2.3% for APE and 1.7% as far as new business premium.
- The equity investment of the company is under 20% of the total investment. Most of it is in blue chips company.
- While ABSLI-AMC has been endeavoring to diversify its distribution base, it depends significantly on the restrictive channel that contributed 65% to new business premium during monetary 2021.
- For new business premium, the working cost proportion of the organization has stayed inside 27-35%, while for the overall premium, the proportion has been 13-16% in the last four financial years.
| Aditya Birla Sun Life | FY2019 | FY2020 | 9M FY2021 |
| Gross premium | 7,511 | 8,010 | 6,582 |
| Income from investment and fees | 3,366 | 625 | 6,877 |
| Total expense incl. commissions | 1,660 | 1,778 | 1,290 |
| Benefits paid | 5,252 | 5,550 | 3,018 |
| Net change in valuation of liability in respect of life policies / Increase in reserves | 3,478 | 780 | 8,743 |
| PAT | 126 | 104 | 70 |
| Total net worth | 2,100 | 2,200 | 2,297 |
| Total Policyholders’ shareholders’ investments | 15,278 | 18,301 | 22,923 |
| Assets held to cover linked liabilities | 25,164 | 22,825 | 27,755 |
| Expense ratio (opex / NPW) | 22.8% | 22.9% | 20.3% |
| Commissions ratio (commissions / NPW) | 6.2% | 6.2% | 5.6% |
| Return on equity | 6.0% | 4.7% | 4.1%* |
| 13th month persistency ratio | 78.0% | 83.0% | 82.4% |
| 61st month persistency ratio | 45.0% | 49.0% | 50.6% |
| Regulatory solvency ratio (times) | 1.98 | 1.78 | 1.70 |
| PARAMETER | MARCH 2021 | MARCH 2020 | YOY CHANGE% |
| Earnings Per Share (Rs) | 292.38 | 274.67 | 6.45 |
| Core EBITDA Margin (%) | 60.72 | 56.76 | 6.99 |
| EBIT Margin (%) | 58.82 | 53.88 | 9.18 |
| Pre-Tax Margin (%) | 58.35 | 53.42 | 9.21 |
| PAT Margin (%) | 44.13 | 39.97 | 10.38 |
| Cash Profit Margin (%) | 47.26 | 42.93 | 10.10 |
| ROA (%) | 29.60 | 32.20 | -8.10 |
| ROE (%) | 34.84 | 38.97 | -10.61 |
| ROCE (%) | 46.44 | 52.52 | -11.58 |
| Net Sales Growth (%) | -3.57 | -12.13 | 70.61 |
| Core EBITDA Growth(%) | 5.14 | 2.74 | 87.50 |
| EBIT Growth (%) | 5.29 | 2.25 | 135.24 |
| PAT Growth (%) | 6.45 | 10.65 | -39.48 |
| EPS Growth (%) | 6.45 | 10.65 | -39.48 |
| Total Reserves (in Crores) | 1686.61 | 1298.87 | 29.85 |
| Total Assets (in Crores) | 1984.55 | 1571.96 | 26.25 |
| Profit After Tax (in Crores) | 526.30 | 494.40 | 6.45 |
CONTACT DETAILS:
Aditya Birla Sun Life AMC Limited
One World Center, Tower-1, 17th Floor, Jupiter Mills Compound, 841,
S. B. Marg, Elphinstone Road, Mumbai, 400013, Maharashtra, India
Tel: +91 22 4356 8008
E-mail: ABSLAMC.CS@adityabirlacapital.com
Website: mutualfund.adityabirlacapital.com
REGISTRAR:
KFin Technologies Private Limited
Selenium Tower-B, Plot 31 & 32, Gachibowli
Financial District, Nanakramguda, Serilingampally
Hyderabad 500 032
Telangana, India
Tel: +91 40 6716 2222
E-mail: absl.ipo@kfintech.com
Website: www.kfintech.com
LEAD MANAGER(S)
- BofA Securities India Limited
- Motilal Oswal Investment Advisors Limited
- Kotak Mahindra Capital Company Limited
- Axis Capital Limited
- JM Financial Limited
- SBI Capital Markets Limited
- Citigroup Global Markets India Private Limited
- YES Securities (India) Limited
- HDFC Bank Limited
- JM Financial Limited
- ICICI Securities Limited
