ICICI Prudential AMC IPO: Prudential to offload 10% stake; ICICI to retain majority holding; focus on operating profit: Nimesh Shah

ICICI Prudential AMC CEO and MD Nimesh Shah said the upcoming offer for sale (OFS) will involve only Prudential selling a 10% stake, reaffirming that ICICI has no plans to dilute its majority position. The AMC, currently a 51:49 joint venture, will remain a subsidiary of ICICI as it moves toward public listing in compliance with Sebi norms.

Speaking to ET Now, Shah said Prudential—an investor since 1998—is exiting partly as part of its long-term journey and regulatory requirement to reduce stake to meet public float norms. ICICI, he asserted, will maintain over 50% ownership.

Operating profit, not net worth, defines AMC valuation

On valuation metrics for the IPO, Shah stressed that mutual fund companies must be valued primarily on operating profit, not net worth or total profit.


“AMCs do not need incremental capital to grow. What matters is the operating profit and the brand and intellectual capabilities we build,” he said. ICICI Prudential AMC holds a 20% share of industry operating profits, significantly higher than its 13–14% share of AUM.

He added that valuation is “in the eyes of the beholder,” and institutional investors have provided extensive feedback before finalising the issue pricing.

Dynamic asset allocation shielded investors in flat market

Shah said ICICI Prudential’s strong focus on dynamic asset allocation helped retail investors navigate a year of muted equity market returns.

Balanced Advantage Funds (BAFs), he noted, had reduced equity exposure to nearly 30% at the September 2024 market peak, cushioning the impact of the market’s year-long stagnation.

“Customers may be pro-cyclical, but our products must be counter-cyclical,” Shah emphasised.

Retail investor behaviour: SIP flows rising despite flat returns

Shah highlighted that investor maturity has improved significantly, with SIP flows continuing to rise even during periods of weak market performance.

SIP inflows across the industry continue to climb, driven by better investor education, wider equity participation, and rising awareness of inflation-adjusted returns.

ICICI Prudential AMC alone now manages 14.5 million unique investors, a number expected to rise as more individuals shift from traditional savings instruments to market-linked products.

AMC margins linked to market mix

On operating margins (0.37%), Shah said profitability depends on the segment mix—equity, debt, ETFs, alternates, real estate, credit—rather than a fixed margin target.

“If the equity market grows, margins improve. If liquid funds grow faster, margins moderate. Profitability will always be a function of market conditions,” he explained.

MF industry growth driven by financialisation of savings

Shah said India’s mutual fund investor base has grown from 1 crore to 5.5 crore in seven years as households increasingly shift from low-yield traditional products to market-driven instruments to beat inflation.

He believes the long-term wealth creation potential of capital markets, combined with professional fund management, will continue to attract new investors.