Canara Robeco AMC IPO opens for subscription; GMP at 13%. Should you apply?

The Rs 1,326 crore IPO of Canara Robeco Asset Management Company has opened for subscription on today, October 9 and will close on Monday, October 13. The issue, entirely an offer for sale, is priced between Rs 253 and Rs 266 per share, valuing the fund house at around Rs 5,300 crore.

The IPO is one of the first by a public sector-backed mutual fund in recent years and is drawing attention for its growth consistency. The grey market premium (GMP) currently stands at 13%, suggesting moderate listing expectations.

Should you subscribe?

Analysts are largely optimistic about the long-term prospects, though near-term upside may be limited given sector headwinds.

InCred Research, in its pre-IPO note, said the AMC’s retail-focused model and steady AUM expansion make it an attractive play among smaller asset managers.

"At the upper price band of Rs 266, we see higher rerating potential versus other PSU players, given its retail-focused approach," the brokerage said.

While the IPO is seen as fairly valued, analysts view the offering as a steady, long-term investment rather than a quick listing play.

Company overview

Canara Robeco AMC manages an average AUM of Rs 1.03 lakh crore as of FY25, maintaining a stable 1.5% market share. It has focused strongly on active equity schemes, which now form nearly 92% of its total AUM, including 80% in equity and 12% in hybrid funds.

About 87% of its assets come from retail and HNI investors, providing a sticky and granular client base. The AMC also leverages Canara Bank’s nationwide branch network and Orix Corporation’s investment expertise, allowing it to balance growth and risk management.

Financials

Financially, the AMC’s performance has been consistent. Net profit rose from Rs 790 crore in FY23 to Rs 1,907 crore in FY25, while revenue grew from Rs 2,046 crore to Rs 4,037 crore over the same period. Its return on equity (ROE) remains strong at 36.3%, comparable with leading private peers.

The company’s equity-heavy portfolio supports higher yield but limits participation in fast-growing passive and ETF categories, analysts noted.

Post listing, Canara Bank’s stake in the AMC will fall from 51% to 38%, and the lender will need to trim it further to 30% by FY30 in line with RBI norms.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)