CANARA ROBECO ASSET MANAGEMENT COMPANY LIMITED - IPO UPDATE

IPO Details

Company Overview

Canara Robeco Asset Management Company Ltd (“Canara Robeco AMC”) is a joint venture between its Promoters, Canara Bank and ORIX Corporation Europe N. V. (previously known as Robeco Groep N.V.). The company is India’s second-oldest asset management company (“AMC”). Their primary activities include managing mutual funds launched by Canara Robeco Mutual Fund and providing investment advice on Indian equities to Robeco Hong Kong Ltd (“Robeco HK”).

Canara Robeco AMC has a wide retail customer base and, as of June 30, 2025, the total Monthly Average Assets Under Management (“MAAUM”) generated from retail investors (inclusive of retail and high-net worth individual investors) was ₹ 1,01,170 Cr., accounting for 86.87% of its total MAAUM. According to the CRISIL Report, their market share as a percentage of QAAUM remained steady, increasing from 1.54% as at March 31, 2023 to 1.61% as at March 31, 2024, and was 1.53% as at March 31, 2025, 1.61% as at June 30, 2024, and 1.54% as at June 30, 2025.

As of June 30, 2025, the total folios invested in their schemes were 0.51 crore, out of which 0.50 crore were individual customer folios, representing 99.01% of their total folios. As of June 30, 2025, they had the 2nd highest share of retail AUM amongst the Top 20 AMCs in India and the highest share of retail AUM compared to Top 10 AMCs (basis AUM). The company has the 3rd highest share of equity (including equity-oriented hybrid) AUM as of June 30, 2025, amongst the top 20 AMCs in India, and the highest share of equity-oriented AUM compared to the Top 10 AMCs.

To develop its marketing and promotion channels for its branded products pipeline, in 2024, Rubicon acquired Validus, a New Jersey headquartered marketer of brand-name formulation products in the US. Between FY23 and FY25, Rubicon held a market share by value of more than 25% for 9 products in FY25, 7 products in FY24, and 2 products in FY23.

Key Highlights

Objects of the Issue

Our View

Canara Robeco AMC, incorporated in 1993, is India’s second oldest asset management company. As of June 30, 2025, out of the 26 schemes that they managed, 15 are equity-oriented schemes, while remaining 11 are debt-oriented schemes. India’s mutual fund industry has been on an outstanding growth trajectory. The country’s Assets Under Management (AUM) have surged from less than ₹ 10 lakh Cr. in 2014 to over ₹ 58 lakh Cr. in mid-2025, driven by rising household savings, digitization, and the growing culture of Systematic Investment Plans (SIPs).

However, Risks to consider are high Competition and Market Penetration, Regulatory Challenges, Market Volatility Risk and economic downturns, Dependence on Distribution Partners, Underperformance by equity-oriented schemes may have a disproportionate adverse impact on the business and revenue.

On the financial front, the company has delivered Revenue and PAT CAGR of 40% and 55% between FY23-FY25. The company operated on PAT margin of 50.37% at Q1FY26. ROE stands at 36.3% at FY25. Its SIP AUM increased from ₹ 15,378 Cr. in FY23 to ₹ 38,625 Cr. at Q1FY26. Its B-30 AUM share up to 24% up from 21% in FY21. Its Current Ratio is at 10.82x at Q1FY2625 improved from 10.13x in FY23.

The issue is priced at a P/BV of 8.03 based on its NAV of Rs. 33.13 at Q1FY26. If we annualise FY26 earnings, at higher price band of ₹ 266, P/E stands at ~22x. As per RHP the company has shown HDFC AMC, Nippon Life India AMC, Aditya Birla Sun Life AMC and UTI AMC as their listed peers. They are currently trading at a P/E of 48.21, 43.35, 24.60 and 22.83 as of September 30, 2025.

The company has been able to grow the brand, business presence and expertise by leveraging their parentage. The issue appears fully priced. Looking at all the factors, risks, opportunities and valuation, and also India’s growing wealth management penetration, investors can invest with long term horizon.