ICICI Prudential Asset Management Co. Ltd (Subscribe)

Highlights

ICICI Prudential Asset Management Company Limited (IPRUAMC), incorporated in 1993, and since 1998, they have been operating as a joint venture between ICICI Bank (51 pct) and Prudential Corporation Holdings Limited (49 pct). IPRUAMC is the 2nd largest Bank led AMC with market share of 13.3 pct as of H1FY26.

The company has a quarterly average asset under management (QAAUM) of Rs. 10,147 bn and 143 schemes comprises of 44 Equity and Equity Oriented Schemes, 20 debt schemes, 61 passive schemes, 15 domestic fund-of-funds schemes, one liquid scheme, one overnight scheme and one arbitrage scheme.

The main business of the company is Mutual Funds, in addition to that, they also have a growing alternates business comprising portfolio management services (PMS), management of alternative investment funds (AIFs) and advisory services to offshore clients (PMS, AIF and advisory, collectively Alternates).

As of H1FY26, they have established a pan-India distribution network comprising 272 offices across 23 states and four union territories. Their distribution model is targeted to be balanced and multi-channelled, encompassing both physical and digital platforms, and is supported by salesforce. Their mutual fund distributors (MFDs) consisted of 110,719 institutional and individual MFDs, 213 national distributors and 67 banks.

They have consistently focused on developing and scaling differentiated products designed to perform across varying market conditions and cater to long-term investor needs, while operating in compliance with the regulatory framework. They have been among the leading AMCs at the forefront of product innovation, consistently demonstrating the ability to scale their business within the Indian asset management industry.

Out of the total proceeds of Rs. 106,026 mn, ~Rs. 10,026 mn would be go towards existing promoter selling shareholders (Prudential PLC) of the company as company expects that listing of the Equity Shares will enhance their visibility and brand image and provide liquidity.

Key Highlights

• Mutual funds have experienced a substantial increase as a proportion of household financial savings, growing from 2 pct to ~7 pct between FY21 and FY24, with the investment value expanding from Rs. 0.64 trillion to Rs. 2.39 trillion at a CAGR of 55 pct during the same period. The overall industry’s AUM is projected to sustain a high growth trajectory of 16-18 pct CAGR, reaching ~Rs.147-155 trillion between FY25-30.
• IPRUAMC is bank led AMC which leverage the extensive distribution network of ICICI Bank, one of their Promoters and a registered mutual fund distributor, which had 7,246 branches across India which contributes 8.3 pct of their Equity and Equity Oriented Schemes QAAUM.
• IPRUAMC focused on building a resilient pipeline of systematic flows, which helps in providing steady and predictable flows to their AUM. IPRUAMC monthly flows from Systematic Transactions was Rs. 48.0 bn during H1FY26 and their total number of Systematic Transactions has increased from 5.7 mn in FY23 to 14.2 mn for H1FY26.
• Their dedicated research team focuses on understanding of business models, industry dynamics, and key performance drivers. Quantitative analysis includes assessment of industry growth prospects, the company’s financial performance and competitive positioning. Qualitative analysis emphasizes management quality, corporate governance standards, and the long-term sustainability of the business. Together, these inputs help them portfolio construction and security selection, helping them make high-conviction investment decisions.
• IPRUAMC’s key growth strategies include (i) Maintain focus on investment performance with a risk calibrated approach (ii) Expand customer base through distinct initiatives, increase penetration in existing and new markets and strengthen relationships with distributors (iii) Grow Alternates business (iv) Diversify product portfolio to suit dynamic customer needs (v) Leverage technology and scale digital capabilities to drive customer acquisition and enhance customer experience.
• The sales of the company have grown by 32.1 pct CAGR Over FY23-25 and profit has grown 32.2 pct CAGR over same year. In FY25 the company reported sales of Rs. 46,828 mn, which grew 38.7 pct YoY. In FY25 the company posted profit of Rs. 26,507 mn which jumped 29.3 pct YoY. In H1FY26, sales/profit grew 25 pct YoY/21.9 pct YoY.

Key Risk

• Unfavorable market changes and economic downturns may result in customer withdrawals or a decrease in customer transactions, can decline IPRUAMC AUM and fees.
• Constant underperformance of any of the schemes of the company can impact AUM of the company.

Financial Performance

Peer Comparison based on FY25 Financials

Valuation

ICICI Prudential Asset Management Company, a joint venture of ICICI Bank and Prudential, is 2^nd largest AMC managing 143 schemes comprises of 44 Equity and Equity Oriented Schemes, 20 debt schemes, 61 passive schemes, 15 domestic fund-of-funds schemes, one liquid scheme, one overnight scheme and one arbitrage scheme. 90 pct of the schemes beating benchmark indices return, backed by their solid investment philosophy and research team. At the upper end of the price band of Rs. 2165, the issue is priced at a PE of 33.07x on FY26E annualized earning. Considering 2^nd largest AMC backed by strong parentage, one Subscribe this issue from a longer-term perspective.

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