ICICI Prudential AMC gets first 'buy' call ahead of listing, PL sets Rs 3,000 target

With its market debut two days away, ICICI Prudential AMC has received its first initiation of coverage, with PL Capital recommending a "Buy" and setting a target price of Rs 3,000, implying 39% upside from the IPO price band of Rs 2,165. The call comes after a heavily subscribed public offer, which closed on Tuesday.

"We are optimistic about its business prospects given its strong performance/parentage, which is driving
the highest net equity flow market share among AMCs and also its superior equity yields due to the lowest distributor payout," the broker said.


The Rs 10,600 crore IPO was subscribed 39.17 times, driven by institutional demand. Qualified institutional buyers subscribed to their portion nearly 124 times, while non-institutional investors subscribed 22 times. Retail investors subscribed to their quota 2.53 times, and the shareholder category was taken up close to 10 times

PL said ICICI Prudential AMC is a proxy play on India's long-term equity growth, citing its scale, distribution strength and consistent outperformance. The company is India's largest active asset manager, with a monthly average assets under management of about Rs 10.75 lakh crore as of November 2025 and the highest market share in net equity flows at 17.5% during the first eight months of FY26.

A key pillar of the bullish view is performance. According to the broker, 90% of ICICI Prudential AMC's active equity assets were in the top performance quintile as of November 2025, the highest among large peers.

The fund house has ranked consistently among the top three on one-year and three-year performance metrics since 2022, helping it gain equity market share even as competition intensified.

The brokerage also highlights superior economics. Despite managing the largest active equity base, ICICI Prudential AMC posted equity yields of 67 basis points in FY25, higher than peers such as HDFC AMC and SBI Mutual Fund.

This is supported by lower distributor payout ratios and a favourable mix of bank-led and direct distribution, aided by ICICI Bank’s closed architecture model.

Financially, the business is expected to compound steadily. PL estimates core profit after tax to grow at a CAGR of 18.5% between FY25 and FY28, the fastest among listed peers, driven by equity AUM growth that is projected to outpace the industry. Return ratios remain among the strongest in the sector, with core RoE exceeding 100%

At the IPO price, the stock is valued at roughly 27 times forward earnings, which the brokerage argues is a discount to comparable listed asset managers. It expects ICICI Prudential AMC to eventually command a premium, citing its distribution reach, diversified revenue streams beyond mutual funds, and sustained market-share gains.

Also read: Mega IPOs smash the villain tag in 2025, delivering nearly 3x returns of smaller listings

While near-term listing gains may be steady, the initiation of coverage just ahead of debut adds to the narrative that institutional investors are positioning for long-term ownership rather than a short-term trade, as India’s largest active fund manager prepares to enter the public markets.

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