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Aditya Birla Sun Life AMC

Aditya Birla Sun Life AMC

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About

Enterprise

+ABSL AMC is the fourth largest asset management company in India since Sep-11 and largest non-bank affiliated AMC since Mar-18 having a track record of more than 25 years and mutual fund QAAUM of Rs. 295,800 Cr as on Mar-22

+ABSL AMC is a joint venture between Aditya Birla Capital Ltd and Sun Life Investments set up in 1994. Its business includes mutual funds, portfolio management services, offshore & real estate offerings

+It has a diversified distribution network of 72,000+ mutual fund distributors, 110+ banks and 240+ national distributors in 280+ locations. More than 80% of the locations are in B-.30 cities

+It has strategic partnership with 80+ digital fintechs and 51% of equity AUM is sourced from mutual fund distributors

+13 passive products were launched in FY22. Currently, there are more than 15 passive products in the pipeline

+ABSL Tax Relief Fund is the second largest ELSS Fund and ABSL Ultra Short Duration is the largest Ultra Short Duration Fund

+ABSL Flexi Cap Fund and ABSL Frontline Equity Fund are the oldest funds of ABSL AMC having completed more than 23 and 19 years respectively

-Ratio of equity to non-equity AUM is 41:59

-Any cap imposed by SEBI on expense ratio charged by AMCs can affect company’s profitability


Industry 

+Mutual fund industry is well poised to post strong growth over the next decade, supported by financialization of saving and investors preference shifting from owning physical assets to financial assets.
+Mutual fund penetration in India is pegged at 12% of GDP which is much lower than global average of 63%

+Currently, Mumbai, Delhi and Bengaluru are the top 3 cities which contribute about 50% to Indian Mutual Fund Industry

+In last 3 years, AUM has shown a CAGR of 15.3% and SIP contribution by 15.2%

+SIP contribution has crossed Rs.12,000 Cr for the first time in Mar-22. This reflects investors’ confidence in long term potential of India's economic growth

+As on Mar-22, QAAUM of Indian mutual fund industry is Rs. 37.7 lakh Cr and more than 80% of the assets are owned by top 10 fund houses

+India has huge untapped potential. Less than 2% people in our country invest in mutual funds whereas in developed economies like US it is much higher. So, India Mutual Fund Industry has a long way to go

-It is a commission based business which is primarily decided by Regulatory authority. So regulatory risk is the key risk in this industry
-Advent of ETFs and Index Funds and their good performance will also keep pressure on Expense ratios and hence the profit margins

-New players have entered in the AMC business -  NJ Mutual Fund , Samco Mutual Fund and WhiteOak Capital Mutual Fund

-Bajaj Finserv and Zerodha has also received SEBI approval for mutual fund business

-MF Industry is set to intensify with many new players submitting applications for MF license. Currently, applications from Helios Capital, Alchemy Capital, Unifi Capital, Wizemarkets Analytics, Angel One, Old Bridge Capital Management and Phone Pe are in process

-Fintech service providers like Paytm and NiYO Money are also looking to foray into the AMC space.

- SEBI has put a ban on NFOs till 1st July 2022 


Governance

+The company has 86.5% promoter holding with Aditya Birla Capital Ltd being the largest promoter having 50.01% holding followed by Sun Life AMC Investments having 36.49%

+It has a strong board with 6 out of 11 members independent and 1 women director

+Well experienced management team and board of directors

Financials

+Asset light business
+YoY operating revenue has increased by 21% in FY22

+Strong ROE of nearly 30% from last 4 financial years

+PAT margin has consistently increased from 2014

+It has consistent dividend paying track record


Valuation

+Lower price multiples

+It is available at a fair valuation

+This stock is currently trading at PE of 22.7 and its listed peers are also trading at a closer PE.

Nippon AMC – 26.8

HDFC AMC – 31.5 and

UTI AMC – 20.4

+Lower P/B of ~7x 

 

 

Highlights

Performing rate for the company

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Relaince Group

Sector: Refineries

Market Price

2,529.50

Market Cap(₹Cr.)

2,529.50

-90.00

Quarterly Results ( Figures in Rs. Crores.)

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Balance Sheet ( Figures in Rs. Crores.)

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Historical Growths

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Major Shareholders

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Shareholders more than 1%

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Fund houses invested in the stock (Figures in % Equity Capital )

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Corporate Action

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Documents

Presentation & Earning Calls

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Credit Rating

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Overview

Aditya Birla Sun Life AMC is a joint venture between Aditya Birla Capital and Sun Life AMC. The company cater to a wide range of customers from individuals to institutions through this pan-India network and offering of customer solutions, which positions it well to attract a large segment of the Indian mutual fund market across varying customer requirements and risk profiles and to develop a broad customer franchise with a strong retail customer base. It has achieved this leadership position through its focus on consistent investment performance, extensive distribution network, brand, experienced management team and superior customer service.

Since the company’s inception in 1994, it has established a geographically diversified pan-India distribution presence. Its distribution network is extensive and multi-channeled with a significant physical as well as digital presence. It 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), 2 liquid schemes, 5 ETFs and six domestic FoFs, as of June 30, 2021. Its flagship schemes include Aditya Birla Sun Life Frontline Equity Fund and Aditya Birla Sun Life Corporate Bond Fund, both of which have grown to become leading funds in India under its management.

Business area of the company

The company operates as an investment management firm. The company offers portfolio advisory and wealth management services.

Awards and Accreditations

  • 2018: Moneycontrol Wealth Creator Awards 2018
  • 2018: Asia Asset Management 2018 Best of the Best Awards.
  • 2019: Asia Asset Management 2019 Best of the Best Awards.
  • 2019: Outlook Money Awards 2019.
  • 2019: Morningstar Awards 2019.
  • 2020: Asia Asset Management 2020 Best of the Best Awards.
  • 2021: Outlook Money Awards 2020.
  • 2021: Asia Asset Management 2021 Best of the Best Awards.

Major Events and Milestones

  • 1994: The Aditya Birla group and The Capital Group of Companies, Inc. USA jointly set up Birla Capital International AMC Limited.
  • 1995: first equity fund - Birla Advantage Fund and first debt scheme - Birla Income Plus was launched.
  • 1996: Expanded operations in Mauritius through Subsidiary, Aditya Birla Sun life AMC (Mauritius).
  • 1999: Acquired rights to manage the schemes of Apple AMC and entered into the Existing Shareholders Agreement with inter alia Sun Life AMC, Sun Life Assurance Company of Canada.
  • 2002: Launched portfolio management services.
  • 2005: Acquired rights to manage the schemes of Alliance Capital Mutual Fund.
  • 2008: Launched our CSIP with life insurance cover at 100 times the first SIP amount (after a three year period).
  • 2011: Expanded business in Singapore and Dubai through our Subsidiaries Aditya Birla Sun Life Asset Management Company Pte Ltd and Aditya Birla Sun Life Asset Management Company, respectively.
  • 2012: Launched Aditya Birla Financial Services Privilege Club, a loyalty program for MFDs.
  • 2014: Conducted first investment event - Voyage, which is annual flagship investment event.
  • 2014: Acquired rights to manage the schemes of ING AMC.
  • 2014: Mutual fund QAAUM (excluding its domestic FoFs) crossed Rs 1,000 billion as of September 30, 2014.
  • 2015: Launched personal finance magazine Samriddhi in select Shatabdi Trains which has reached over 5 million passengers across various routes, of June 30, 2021.
  • 2016: Launched “Active Account” application, to facilitate quick and easy transactions in liquid funds.
  • 2016: Launched ‘Investors Hangout’ and the same received over 70,000 active users and over 5.5 million YouTube views, as of June 30, 2021.
  • 2017: Launch of instant redemption facility for liquid fund investors.
  • 2018: Achieved over 6 million total folios (including our domestic FoFs).
  • 2018: Mutual fund QAAUM (excluding its domestic FoFs) crossed Rs 2,500 billion as of September 30, 2018.
  • 2021: Crossed closing AUM milestone of Rs 3,000 billion on July 29, 2021.
Brands Of Aditya Birla Sun Life AMC

Brands Of Aditya Birla Sun Life AMC

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