In today’s Finshots, we break down the ICICI Prudential AMC IPO, which opened for subscription today (12th December, 2025) and closes on 16th December, 2025.

The Story

ICICI Prudential AMC hardly needs an introduction. They’re one of India’s oldest and most seasoned asset managers, with a track record that stretches back over 30 years.

Their story began in 1993, when the ICICI group dipped its toes into a mutual fund industry that was still finding its feet. Back then, the space was dominated by state-owned giants, especially UTI (Unit Trust of India), which practically ran the show on its own.

Five years later, a big milestone arrived — the partnership with Prudential Plc, the London-based insurance and asset management heavyweight. That’s when ICICI Prudential AMC formally took shape, with ICICI Bank holding a 51% stake and Prudential Plc owning the rest through its subsidiary, Prudential Corporation Holdings. And from just two branches and six employees, the company has morphed into a massive nationwide presence with over 272 locations and more than 3,500 employees. Today, it even holds the crown as India’s largest asset management company when you look at active mutual fund quarterly average assets under management (QAAUM), clocking in at over ₹1.01 lakh crore.

The business is simple. People hand over their savings through mutual funds and related products, and ICICI Prudential AMC decides how to invest that money whether it’s equities, bonds, you name it. Their job is to choose well, manage risks, and ideally deliver better long-term returns than what most investors might achieve on their own.

And they’re now intending to list on the Indian bourses with a ₹10,600 crore IPO. The offer is essentially an offer for sale (OFS) in its entirety, with Prudential Corporation Holdings diluting its stake in the company to about 39% post-listing. In fact, as you read this, it has already sold around 4.5% of its original stake to ICICI Bank, pushing the bank’s holding up to 53%, along with other marquee investors such as Abu Dhabi Investment Authority, the family offices of Azim Premji and Rakesh Jhunjhunwala, and insurers including SBI Life, HDFC Life and Go Digit General Insurance. And through this IPO, it will offload an additional 10% of its stake to public investors like you and me.

So your first question here is probably this — since it’s entirely an OFS and none of the IPO proceeds are flowing into the business, what do you really make of it?

Well, the first thing you’ll notice is that the promoter holding still stays pretty strong even after the IPO. And since you can’t judge this issue based on how the company plans to use your money — because it won’t, the only real way to look at it is by understanding how the business is doing today and where it could head in the future.

So let’s look at their business model. At a broad level, they run a whole menu of schemes — equity funds, debt funds, hybrid funds, index and ETF products, plus PMS (Portfolio Management Service) and alternative funds for wealthier or institutional clients. And the way they make money is fairly straightforward. They earn fees on the total pool of money they manage, or AUM. So their income naturally grows when more investors hop on board and when the markets are in a good mood.

Over the years, that’s more or less what has played out. Fees and commissions make up about 94% of its revenue from operations, and that number has climbed from ₹2,837 crore in FY23 to ₹4,977 crore in FY25. That’s a solid 32% compound annual growth rate (CAGR) over the period. And it isn’t happening in isolation. The backdrop itself is favourable. Crisil’s industry analysis suggests that the mutual fund industry in India is set to keep expanding, with QAAUM expected to grow at 16–18% over the next five years and touch roughly ₹155 trillion by FY30.

That’s especially good news for ICICI Prudential AMC because mutual funds account for nearly 93% of its total annual average AUM. Now, the RHP doesn’t spell out exactly how much revenue comes from equity, debt, or passive funds, but the industry norm is pretty clear: equity and equity-oriented schemes usually command higher fees because they’re actively managed and require more research muscle.

And if past trends offer any clue, the tilt towards equity has been strengthening.

Equity-oriented schemes in the overall industry (the ones with higher fee yields) have grown their share of total AUM from 31% in FY21 to 44% in FY25. They’re also the category that continues to attract the strongest net inflows, while debt has been losing ground. Sure, there’s no guarantee this trend will run forever. But Indian capital markets have been on a steady upward march with rising market caps, a surge in demat accounts, a healthy IPO pipeline, and consistent equity inflows from domestic institutional investors. All of this points to a deepening market, which naturally lifts mutual fund AUM over time.

And if that trajectory holds, ICICI Prudential AMC’s revenue engine should keep humming along too.

The only catch is the change in tax rules. Ever since the government scrapped long-term capital gains benefits and indexation for debt funds, actively managed debt products have lost some of their appeal for long-term investors. And when something becomes less attractive, money doesn’t sit still. It usually finds its way to simpler, lower-tax alternatives like bank deposits or other fixed-income options. At the same time, investors are gradually warming up to cheaper products such as passive funds and ETFs, which charge a fraction of the fees. So even if the overall industry keeps growing, the fees that fund houses earn on every rupee they manage may not rise at the same pace.

But that being said, there are some solid positives too. The company’s net profits have grown steadily, clocking a 32% CAGR over the past two years to reach ₹2,650 crore. And then there’s the operating margin, a key metric for AMCs. Think of it as the profit they earn for every rupee of assets they manage. For ICICI Prudential AMC, this margin has held firm at 0.36% for three years in a row. To put that into perspective, its closest peer HDFC AMC runs at around 0.35–0.36%, while others like Nippon Life India and Aditya Birla Sun Life are much lower at 0.23–0.26%. So on this front, ICICI Prudential AMC is right at the top of the pack.

That brings us to how ICICI Prudential AMC stacks up against its competitors on other key metrics. And honestly, it looks strong here too. Its revenue from operations and net profits are the highest among peers. And when you look at return on equity (RoE) or essentially how much profit the company squeezes out of each rupee of shareholder money, the numbers are striking. Its RoE is around 83% for FY25 and nearly 87% annualised for the first half of FY26. Most other listed AMCs sit somewhere between 13–36%.

A big part of this outperformance comes from scale. When you manage more assets, your fixed costs get spread out more efficiently. That keeps expenses low relative to the size of the business, which then pushes up operating profits and, naturally, net profit after tax.

Despite this stronger performance, the market isn’t exactly pricing it at a hefty premium. At the upper IPO price band of ₹2,165 per share, the company is valued at around 40 times earnings (P/E). That’s broadly in line with peers. For comparison, HDFC AMC trades at about 45 times, while Nippon Life India sits closer to 41 times.

So yeah, apart from the IPO being an OFS and the usual uncertainty around whether future revenue growth can keep pace with past trends, there aren’t too many red flags here. In fact, that’s what makes this issue stand out, especially when you think about some of the recent IPOs with sky high valuations and narratives that are harder to justify.

If ICICI Prudential AMC can continue steering investor money smartly and keep delivering higher earnings per share… well, that’s something only time will tell.

Until then…

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