UTI AMC, the second largest AMC in India in terms of total AUM, is 8th largest in terms of QAAUM (`1,33,600cr) as of June 30, 2020. In terms of live folios, UTI AMC accounts for 12.2% of the 89.7mn industry folios as of March 31, 2020.
Outlook & Valuation: At the upper end of the IPO price band, it is offered at
25.4x its FY20 earnings and 5.25% of Q1FY21 QAAUM, demanding `7,024cr market cap, which we believe is reasonable. Further, listed peers like HDFC AMC
trades at 35x FY20 earnings and Nippon AMC trades at 37x FY20 earnings.
Additionally, HDFC and Nippon AMC trade at 12.56% and 8.55% of Q1FY21 QAAUM, respectively. Considering attractive valuation, huge growth potential of
MF industry, asset-light business and higher dividend payout ratio, we are positive on this IPO and rate it as SUBSCRIBE.
