Aditya Birla Group plans to take its asset management business public through a ₹5,000 crore initial public offering to raise funds for expansion, three people with direct knowledge of the matter said.
Aditya Birla Sun Life Asset Management has started talks with potential merchant bankers for the IPO, which is likely to be launched in the June quarter, said the people cited above.
“The AMC (asset management company) is planning to offer around 20% to the public in the proposed IPO,” said one of the three people cited above. “The value of the business is pegged at around ₹26,000 crore as per recent discussions between potential merchant bankers and the AMC’s promoters.”
Birla Sun Life AMC is India’s fourth-largest asset management firm with around ₹3 trillion of assets under management. The company is 51% owned by Aditya Birla Capital Ltd (ABCL) and the rest by Canada’s Sun Life Financial Inc.
Aditya Birla Capital, whose current market cap is ₹ 30,000 crore, derives a majority of its market value ( ₹13,000-14,000 crore) from the AMC business alone.
“For some of the subsidiaries of ABCL, capital raising routes such as QIP (qualified institutional placement) and preferential allotment are also being planned. Multiple capital raising routes are being planned,” the second person said.
Capital market rules require every company to have a minimum of 25% in public shareholding within three years of listing though companies typically offer 10-15% in an IPO. “However, since the equity market is buoyant at present, the promoters of Birla Sun Life AMC are planning to mop up as much money as possible through the IPO,” the person said.
