Sebi paves the way for ICICI Pru AMC's IPO

The capital markets regulator, Sebi, has cleared the decks for Mumbai-based ICICI Prudential Asset Management Co. to launch its initial public offering (IPO), which will be an offer for sale by its promoter, Prudential Corp. Holdings. The fund house submitted its draft papers to the Securities and Exchange Board of India (Sebi) on 8 July. The IPO, reportedly pegged at around ₹10,000 crore, is widely expected to attract strong interest from both retail and institutional investors, believe market participants. Other listed players in the asset management space include HDFC Asset Management Co., Nippon Life India Asset Management, Aditya Birla Sun Life AMC, UTI Asset Management Co., Canara Robeco Asset Management Co. and Shriram Asset Management Co. The purpose of the offer is to carry out the Offer for Sale and to gain the benefits of listing the equity shares on the stock exchanges, as per the draft document. The IPO will be shepherded by a formidable line-up of book-running lead managers, including ICICI Securities, Citigroup Global Markets India, Morgan Stanley India Co., BofA Securities India, and Goldman Sachs (India) Securities, among others. KFin Technologies Ltd will be the registrar to the offer. The company has been steadily expanding its alternates business, which includes portfolio management services (PMS), the management of alternative investment funds (AIFs), and advisory services for offshore clients. ICICI Pru AMC’s quarterly average AUM grew at a solid 33% CAGR over FY23-25 to ₹8.8 trillion, making it the second-largest player with a 13% market share at the end of FY25, Centrum Broking noted in its 12 July report. Among the top ten risks, the most significant was the possibility that if the company’s investment products underperformed, its assets under management, including PMS, AIF, and advisory assets, could decline, negatively impacting its business, financial performance and cash flows. Another key risk highlighted was rising competition from both existing and new players, which could slow growth, erode market share or lead to lower fees, ultimately affecting the company’s business, results of operations, financial condition and cash flows. Moreover, the document highlighted another key risk: “While the majority of our funds are actively managed, we also offer passive products, such as index funds and exchange-traded funds. However, the fees earned on such passive products are typically lower than those earned on active funds. Consequently, any shift in investor preference from active to passive products may adversely affect our fee income and, in turn, our revenue from operations.” This IPO comes at a time when asset management companies are witnessing a steady rise in assets under management, driven by the financialization of savings and a growing number of investors opting for equity-led investment avenues.