Markets

Aditya Birla Capital board gives nod to explore IPO for mutual fund arm

Suresh P Iyengar Mumbai | Updated on March 17, 2021

Aditya Birla Sun Life AMC had an average AUM of ₹2.55-lakh crore in the quarter ended Dec

Aditya Birla Capital plans to spin off its mutual fund subsidiary into a separate entity and list it on the stock exchange soon.

The Board of Directors has provided in-principle approval to explore an initial public offering (IPO) of Aditya Birla Sun Life Asset Management Company, a material subsidiary of the company, subject to market conditions, receipt of applicable approvals and other considerations, said Aditya Birla Capital in a statement on Wednesday.

The sharp run-up in equity market and subsequent jump in asset under management (AUM) of mutual funds have made many fund houses consider listing on the exchange for better valuation.

Aditya Birla Mutual Fund had an average AUM of ₹2.55-lakh crore in the quarter ended December. It ranked seventh with an equity AUM of ₹90,700 crore in February.

Another MF IPO

Earlier, State Bank of India had also expressed interest in listing its mutual fund subsidiary on the exchange. However, SBI Mutual Fund, the country’s largest fund house, is a joint venture between SBI and Amundi, a European asset management company.

Currently, HDFC Asset Management Company and Nippon India Mutual Fund are the two listed fund houses in India.

HDFC AMC had an average AUM of ₹3.89-lakh crore as of the December quarter, while that of Nippon India was at ₹2.13-lakh crore. The equity AUM of HDFC AMC was up 9 per cent at ₹1.58-lakh crore in February from ₹1.45-lakh crore in January; Nippon India’s increased 10 per cent to ₹1.14-lakh crore (₹1.04-lakh crore) in the same period.

New heights

The asset under management of mutual fund industry hit an all-time high of ₹31.6-lakh crore in February with marked inflow in debt and hybrid categories, coupled with mark-to-market gains in the domestic equity market.

However, the outflow from equity mutual funds continued for the eighth month in a row, and registered a net outflow of ₹4,534 crore in February. However, it was much lower than the ₹9,253 crore logged in January, an indication that investors are gaining confidence on the current market valuation.

Published on March 17, 2021

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