ICICI Prudential AMC IPO: Equirus sets share price target at Rs 2,900 ahead of market listing

Equirus Securities has initiated coverage on ICICI Prudential Asset Management Company Ltd ahead of its listing, assigning a 'Long' rating and setting a target price of Rs 2,900 for March 2027. The brokerage said the Indian mutual fund industry had recorded robust growth over the past five years, with revenue, Ebitda and profit after tax growing at a compound annual rate of around 16 per cent, 19 per cent and 23 per cent, respectively.

Industry profit after tax crossed Rs 150 crore in FY25, equivalent to about 23 basis points of average quarterly average AUM. ICICI Prudential AMC, Equirus said, emerged as the most profitable player in the industry, with the highest profit after tax market share of 17.4 per cent in FY25.

From a business-mix perspective, Equirus described ICICI Prudential AMC as India’s largest equity-focused asset manager, with a 13.4 per cent share of equity AUM. It attributed this position to consistent scheme performance, a sales force of more than 2,900 people and deep penetration across retail and high-net-worth investors. Equity AUM had grown at around a 27 per cent CAGR since FY15, supporting a structurally higher-yielding mix.

The brokerage said ICICI Prudential AMC had also scaled up its non-mutual fund businesses rapidly, which now contributed around 15 per cent of revenues and generated yields of over 120 basis points. Supported by an asset-light operating model, the company delivered industry-leading profitability, with Ebitda margins of over 70 per cent, profit after tax margins above 50 per cent and return on equity in the 70–80 per cent range.

Equirus expected ICICI Prudential AMC’s revenue and profit after tax to grow at a CAGR of around 16 per cent over FY25–FY28, driven by strong growth in mutual fund and alternative assets under management. It projected quarterly average AUM growth of 18.6 per cent over the same period, led by resilient equity flows, rising passive penetration and sustained traction in AIF and PMS businesses.

The brokerage highlighted the company’s strong equity franchise, reflected in a 16 per cent plus share of monthly SIP inflows and an equity-heavy AUM mix of 59 per cent as of September 2025. Despite intensifying competition, ICICI Prudential AMC had maintained a stable 12–13 per cent overall market share over the past five years, underscoring the resilience of its distribution and customer franchise, it said.

While mutual fund revenue yields were expected to moderate towards 45 basis points, Equirus said the growing contribution from higher-yielding alternatives should cushion blended yield compression and support margins.

On valuations, the brokerage said ICICI Prudential AMC traded at around 30 times FY27 estimated earnings and 26 times FY28 estimates, at a 10–15 per cent discount to its closest peer despite superior profitability, stronger equity market share and better fee retention.