All you need to know about

ADITYA BIRLA SUN LIFE AMC LIMITED IPO

Face Value: Issue Size*:

Price Band:
INR 5 INR 27,683 mn
INR 695 –
Bid Lot & Size: Issue Type:
20 Equity Shares 100% Book Building INR 712
*At upper end of the price band

Issue Opens: 29th Sept 2021; Issue Closes: 01st Oct 2021

Shareholding (%) Pre IPO Net issue

Share Reservation
(%)
Promoter & Promoter 100
Group QIB 50
Public - NII 15
*Source: RHP Retail 35

Issue Managers
Company Leadership Kotak Mahindra Capital,
Kumar Mangalam BofA Securities, Citi Group,
xw Non- executive chairman
Birla Axis Capital, HDFC Bank,
Managing Director and BRLMs ICICI Securities, IIFL
A Balasubramanian
CEO Securities, JM Financial,
Parag Joglekar CFO Motilal Oswal, SBI capital
Markets, Yes Securities.
Registrar Link Intime India Pvt. Ltd.

Company Overview:
Aditya Birla Sun Life AMC Limited ranked as the largest non-bank affiliated AMC in India by QAAUM
since March 31, 2018, and among the four largest AMCs in India by QAAUM since September 30,
2011, according to the CRISIL Report. The company managed total AUM of ₹2,936.42 billion under
their suite of mutual fund (excluding their domestic FoFs), portfolio management services, offshore
and real estate offerings, as of June 30, 2021. Since their inception in 1994, the company has
established a geographically diversified pan-India distribution presence covering 284 locations
spread over 27 states and six union territories. The company managed 118 schemes comprising
37 equity schemes (including, among others, diversified, tax saving, hybrid and sector schemes),
68 debt schemes (including, among others, ultra-short duration, short-duration and fixed-maturity
schemes), two liquid schemes, five ETFs and six domestic FoFs, as of June 30, 2021.
This document summarizes a few key points related to the issue and should not be treated as a comprehensive summary. Investors are requested to refer the Red
Herring Prospectus for further details regarding the issue, the issuer company and the risk factors before taking any investment decision. Please note that investment in
securities is subject to risks including loss of principal amount and past performance is not indicative of future performance. Nothing herein constitutes an offer of
securities for sale in any jurisdiction where it is unlawful to do so. This document is not intended to be an advertisement and does not constitute an invitation or form any
part of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the
basis for any contract or commitment whatsoever.

IIFL Research: E-mail - research@iifl.com

 Objects of the Offer

The offer comprises of an offer for sale of 38,880,000 equity shares, the proceeds of which would
go directly to the selling shareholders and the company would not receive any proceeds from the
offer. The objective of the offer is to carry out the Offer for sale and to achieve the benefits of listing
the Equity Shares on the Stock Exchanges.

Consistent Track Record of Financial Performance

Aditya Birla Sun Life AMC has seen a decrease in revenue due to lower sentiments of the public
during the Pandemic and the higher volatility in the mutual fund industry. Yet, the company has been
able to increase its EBITDA margin from 49% in FY19 to 62% in FY21 and its PAT margin from 32%
to 44% during the same period.

(`₹ in million) FY19 FY20 FY21

Revenue from Operations 14,060.67 12,338.35 11,910.28
EBITDA 6,839.03 7,026.92 7,388.87
EBITDA Margin (%) 49% 57% 62%
PAT 4,467.99 4,944.02 5,262.80
PAT Margin (% of revenue) 32% 40% 44%
ROE (%) 36.61% 37.54% 30.87%
EPS 15.51 17.17 18.27

Competitive Strengths

Largest Non-bank Affiliated Asset Manager

in India
Aditya Birla Sun Life AMC has maintained their position as the
largest non-bank affiliated AMC in India by QAAUM since
March 31, 2018 as well as among the four largest AMCs in
India by QAAUM since September 30, 2011, according to the
CRISIL Report. Their total QAAUM grew at a CAGR of 14.55%
from ₹1,365.03 billion as of March 31, 2016 to ₹2,692.78 billion
as of March 31, 2021, and further to ₹2,754.54 billion as of June
30, 2021. Further, the company’s equity-oriented MAAUM
grew at a CAGR of 24.94% from ₹323.45 billion as of March
31, 2016 to ₹984.80 billion as of March 31, 2021, and further to
₹1,080.44 billion as of June 30, 2021. Their share of SIP AUM
in total equity-oriented mutual fund AUM increased from
23.66%% as of March 31, 2016 to 38.09% as of June 30, 2021.
In India, as equity-oriented schemes generally pay higher
management fees compared to other schemes, a higher
equity-oriented scheme mix would help them achieve higher
revenues and profitability.
Well Recognized Brand with Experienced Promoters
Aditya Birla Sun Life AMC benefits from the strong track record, reputation and experience of its
Promoters, ABCL (an Aditya Birla group company) and Sun Life AMC, and their respective
affiliates, which has enabled them to build a brand that their customers trust and that has a strong
recall. The Aditya Birla group is a multi-national conglomerate and, over the last seven decades,
has grown to become one of India’s largest and most respected corporate groups. The Aditya
Birla group holds a leadership position in a variety of sectors such as metals, cement, carbon
black, viscose staple fibre, mobile telecommunications, textiles, fashion retail, chemicals and
financial services, among others and employs approximately 120,000 people with operations in
36 countries around the world.
Sun Life is a leading international financial services organization providing insurance, wealth and
asset management solutions to individual and corporate clients. Sun Life has operations in a
number of markets worldwide, including Canada, the United States, the United Kingdom, Hong
Kong, Australia and several countries across Asia. As of June 30, 2021, Sun Life Financial Inc.
had a market capitalization of C$37.43 billion.

Growing Individual Investor Customer Base Driven by Strong Systematic

Flows
Aditya Birla Sun Life AMC’s individual investor MAAUM grew a CAGR of 18.38% from ₹546.13
billion as of March 31, 2016 to ₹1,333.53 billion as of June 30, 2021. The company’s individual
investor MAAUM mix increased from 39.95% as of March 31, 2016 to 47.01% as of June 30,
2021, which was the second highest increase among the five largest AMCs in India by QAAUM,
according to the CRISIL Report. The growth in Aditya Birla Sun Life AMC’s individual investor
MAAUM and customer base has been largely driven by the development of their digital platforms,
particularly in the utilization of systematic transactions by their customers, as well as the
company’s focus on building relationships with distributors and wide channel distribution across
smaller emerging markets, especially through deepening their B-30 cities presence.

Diverse Product Portfolio with superior Fund Performance

As of June 30, 2021, Aditya Birla Sun Life AMC managed 112 mutual fund schemes, several of
which have recorded superior performance compared to industry averages, as well as six
domestic FoFs. The company also provides portfolio management services, offshore funds and
alternative investments. Further, their fund offerings can be customized to meet an individual’s
specific financial goals in the form of savings solutions, regular income solutions, tax saving
solutions and wealth solutions. The company’s well-diversified product suite has allowed them to
cater to the varying needs and risk profiles of their investors and effectively navigate through
changes in economic conditions.
Pan-India Diversified Distribution Network
As of June 30, 2021, Aditya Birla Sun Life AMC had a presence in 284 locations, comprising 194
branches in India (and three outside India), spread over 27 states and six union territories, which
were supplemented by 90 EM representatives. Of these, 143 branches and all 90 of their EM
representatives were located in B-30 cities. The company believes that the EM areas are untapped
markets in India which have a high potential of assisting them in growing their AUM and expanding
to new catchment areas without material capital expenditure. The company has a capability to build
deep and strong relationships with distributors which is demonstrated by their highly diversified
distribution network, which included over 66,000 KYD-compliant MFDs over 240 national distributors
and over 100 banks/financial intermediaries, as of June 30, 2021. The diversification of their
distribution base has led to a reduction in the concentration of AUM sourced from the top 10
distributors (in terms of AUM sourced) from 49% in the financial year 2016 to 37% in the financial
year 2021.

Long-term Track Record of Innovation in and Use of Technology

The company’s online engagement has seen significant growth in recent years, and digital
transactions represented 89.10%, 87.75%, 77.01% and 70.92% of their total transactions (excluding
SIP and STP installments) for the three months ended June 30, 2021 and the financial years 2021,
2020 and 2019, respectively. Aditya Birla Sun Life AMC utilize automation and digitization initiatives
primarily towards improving scalability by ensuring superior and continuously improving customer
service as well as increasing efficiency and reducing costs. The company has deployed a number of
technology initiatives to enhance their customers’ experience including implementation of digital
paperless onboarding, video facility for KYC processes, transaction processing via social media
applications, data analytics to generate models for pre-approved offers, and voice-based customer
services, as well as features such as optical character recognition, facial recognition, geotagging and
e-signatures.

Strategies Going Forward

Continue to Increase Geographic Reach and Strengthen Relationships with

their Distributors
Aditya Birla Sun Life AMC intends to continue to increase their footprint across India by focusing on
growing their presence in B-30 cities and rural markets that remain underpenetrated and have less
competition. Entering these markets at an early stage will enable them to maximize both consumer
mindshare and market share in such areas. EM representatives channel would enable the company
to expand their geographical reach through a low-cost structure that concentrates on untapped high
potential markets. The company has an established EM team dedicated towards deepening their
EM presence. The team operates on a Build, Operate & Transfer (“BOT”) model, and evaluates
each potential location meticulously in consideration of several parameters including, among others,
banking deposit base, MFD base and per capita income.
Continue to Focus on Delivering Sustained Investment Performance
Aditya Birla Sun Life AMC seeks to assist their fund managers in continuing to generate superior risk-
adjusted returns through the use of disciplined and structured investment processes supported by
clearly defined in-vestment objectives, fundamental proprietary research and their “hands-on”
approach to asset management. The company strives to deliver best-in-class investor experience
through their variety of product offerings and by consistently delivering on strong investment
performance across all their schemes. Aditya Birla Sun Life AMC plan to continue to further grow and
diversify their fund portfolio by using market research, innovation and distributor feedback and
launching funds that will continue to better position them in an increasingly crowded marketplace. The
company plans to continue meeting or surpassing their clients’ expectations, which will lead to further
growth and brand recognition.

Continue to Attract and Retain Good Quality Talent

The strength of Aditya Birla Sun Life AMC’s senior management and investments teams have been
instrumental to growth and leading market position, and the company plans to use their strong
employee value proposition to continue to attract and retain high quality, result-driven people. The
company seeks to foster a culture of ownership that better aligns the interests of their employees with
their interests through employee incentives such as their proposed ESOP Scheme, which was
approved by their Board and their Shareholders in April 2021. Aditya Birla Sun Life AMC will continue
to invest in upskilling their people to differentiate their teams from those of their peers in the rapidly
evolving financial services sector. The company’s talent development programs are curated to
develop leaders across all levels and they plan to further enhance their leadership competencies
through the various capability building programs that they currently offer throughout the year. The
company also aims to continue developing a robust pool of high potential leaders to support their
business and growth.

Leverage Digital Platforms to Increase Customer Acquisition

Aditya Birla Sun Life AMC plan to further develop their digital platforms and to continue investing in
technology and digital marketing initiatives in order to improve customer acquisition rates and
customer experience. The company envisage using existing and new digital platforms and
analytical tools to identify and capitalize on cross-selling and upselling opportunities, facilitate
customer segmentation, improve their understanding of customer behavior, develop and implement
targeting and personalization strategies, and improve customer service using predictive analytics. In
addition, the company is actively exploring potential strategic relationship opportunities with both
conventional and non-conventional large digital businesses operating in the spaces of e-commerce,
over-the-top (“OTT”) channels and aggregators to capture AUM growth driven by the increasing
importance of digital distribution.

Enhance Product Portfolio by Developing their Investment Offerings

Aditya Birla Sun Life AMC seeks to grow their AUM through need-based and customer-centric
products that address the core needs of their diversified customer base. As part of their product
development strategy, the company intends to continue developing products for their customers
based on investment opportunities identified by their investment team and which complement their
existing product suite. In addition to their existing comprehensive product development strategy,
Aditya Birla Sun Life AMC is also focused on developing certain specific product categories including,
in particular, their alternative investments and passive products. The company has established a team
dedicated to growing their alternative investments, and are in the process of putting in place the
necessary digital tools to enable end-to-end automation for efficient operational and investment
execution.
 Management

Kumar Mangalam Birla (Non-executive Chairman):

He is also the chairman of the Aditya Birla group and the chairman on the boards of key group
companies in India and globally, such as, Novelis Inc Canada, Thai Rayon Public Company Limited,
Hindalco Industries Limited, Grasim Industries Limited, Aditya Birla Capital Limited, Century Textiles
and Industries Limited, UltraTech Cement Limited and Aditya Birla Fashion and Retail Limited. He
holds a bachelor’s degree in commerce from University of Bombay and a master’s degree in business
administration from London Business School. He is also a qualified Chartered Accountant and has
held several key positions on various regulatory and professional boards. An erstwhile director of the
Central Board of Directors of the RBI, he was also chairman of the advisory committee on corporate
governance constituted by SEBI and served on the Prime Minister of India’s Advisory Council on
Trade and Industry.

A Balasubramanian (Managing Director and Chief Executive Officer):

He has been associated as an employee of the Company since 1994. He has completed advanced
management programs from Indian Institute of Management, Bangalore and Harvard Business
School. He also holds a bachelor’s degree in science (mathematics) and a master’s degree in
business administration from GlobalNxt University. Presently, he is the chairman of the valuation
committee at AMFI, a member of the Board of Governors of National Institute of Securities Markets,
member of the advisory committee of the SEBI Investor Protection and Education Fund and Corporate
Bonds and Securitization Advisory Committee. He is on the board of governors of the National
Institute of Securities Market.

Parag Joglekar (Chief Financial Officer):

He holds a bachelor’s degree in commerce from the University of Bombay. He is a member of
Institute of Chartered Accountants of India and is a member of the Institute of Cost and Works
Accountants of India. He has previously worked at Strategic Capital Corporation.
Risks

1. Revenue and profit are largely dependent on the value and composition of the AUM of
the schemes managed by them and any adverse change in their AUM may result in a
decline in their revenue and profit.
2. Underperformance of investment products in respect of which they provide asset
management services could lead to a loss of investors, reduction in AUM and adversely
affect their results of operations and reputation.
3. The growth of their AUM may be affected due to the unavailability of appropriate
investment opportunities or if they close or discontinue some of their schemes or
services.
4. Credit risks related to the debt portfolio of their funds may expose them to losses, which
may have an adverse effect on their business.
5. Failure or delay to obtain, maintain or renew regulatory approvals could expose them to
penalties and restrictions.
6. Competition from existing and new market participants offering investment products
could reduce their market share or put downward pressure on their fees.
7. The company is required to prioritize the interests of the unitholders of their schemes,
which could conflict with the interests of their shareholders and could have an adverse
effect on their business

* For complete list of risk factors kindly refer to the Red Herring Prospectus.

Disclaimer

The Company is involved in the initial public offering of Aditya Birla Sun Life AMC Limited, in the capacity of a Book Running Lead
Manager and a Syndicate Member to the Issue. However, IIFL Securities Limited shall not be in any way responsible for the
contents hereof, any omission there from or shall not be liable for any loss whatsoever arising from use of this document or
otherwise arising in connection therewith, including with respect to forward looking statements, if any. IIFL makes no
representation/s or warranty/ies, express or implied, as to the contents hereof, accuracy, completeness or reliability of any
information compiled herein, and hereby disclaims any liability with regard to the same. Neither IIFL Securities Limited nor any of
its affiliates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct,
indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the
information. You shall verify the veracity of the information on your own before using the information provided in the document.
Investors are requested to review the prospectus carefully and obtain expert professional advice.

IIFL Group | IIFL Securities Ltd (CIN No.: U99999MH1996PLC132983) IIFL House, Sun Infotech Park, Road No. 16V, Plot No. B-
23, MIDC, Thane Industrial Area, Wagle Estate, Thane - 400604. Tel.: (91-22) 2580 6650 *Customer Service: 40071000 *Stock
Broker SEBI Regn: INZ000164132 *NSE: 10975 *BSE: 0179 *MCX:55995 *NCDEX:378 *Depository: INDP185 2016 *MF
Distributor ARN: 47791, *PMS SEBI Regn.: INP000002213, *Investment Adviser SEBI Regn: INA000000623, *Research Analyst
SEBI Regn:- INH000000248 | Kindly refer to www.indiainfoline.com for detailed disclaimer and risk factors.

For Research related queries, write at research@iifl.com

For Sales and Account related information, write to customer care: cs@iifl.com or call on 91-22 4007 1000