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Ahead of the listing of the ICICI Prudential Asset Management Company (AMC) stock on Friday, December 19, brokerage firm PL Capital has initiated coverage on it with a buy rating. The brokerage firm has fixed the target price of ₹3,000, valuing the stock at a multiple of 38 times on September 2027 core earnings per share (EPS). Meanwhile, the ICICI Prudential AMC IPO allotment date is likely today. i.e., Wednesday, December 17. The public issue was subscribed to over 39 times, and shares of the company are trading at a premium of ₹304 in the grey market today.

PL Capital believes ICICI Prudential AMC may eventually command a premium to HDFC AMC due to better distribution and diversification while having similar profitability.

The brokerage firm is bullish on the stock because of the company's strong business prospects, due to its strong performance and parentage, which is driving the highest net equity flow market share among AMCs.

Here are five key points highlighted by PL Capital about ICICI Prudential AMC. Let's take a look:

1. Consistent superior performance: PL Capital highlighted that ICICI Pru AMC has shown the best performance in the one-year bucket, while it has been ranked consistently among the top three in the three-year bucket since February 2022.

Moreover, net equity flow market share in FY25 and eight months of FY26 (8MFY26) was the highest among AMCs at 15.2% and 17.5%, respectively, compared to the stock market share of 13.2% and 13.8%, respectively.

"Its performance is more risk efficient than peers due to lower concentration risk and SMID (small and mid-cap) exposure. As of November 2025, its top five schemes contributed 53% to equity MAAuM (monthly average assets Under Management) versus 64% for HDFC AMC and 71% for NAM," said PL Capital.

2. Solid pedigree: PL Capital highlighted that despite having the largest active equity base, yields are superior at 67bps (FY25) versus 62.5bps, 57.5bps, and 61.1bps for HDFC AMC, SBIMF, and NAM, respectively, as payout ratio is lowest at 46% (versus 48% of HDFC AMC, 53% of SBIMF, and 53% of NAM.

Debt yield is best at 32.6 bps, led by better three-year performance. Hence, ICICI AMC has the highest MF yield at 47.4bps compared to HDFC AMC's 46.5bps and NAM's 37.4bps, said PL Capital.

3. Strong parentage: ICICI Bank provides access to a vast distribution network of 7,246 branches and integration with the bank’s digital platforms. Bank’s closed architecture leads to ICICI AMC accounting for 73.7% of overall MF sales by the bank and 70% of ICICI Bank’s MF-related AAuM, said PL Capital.

4. More diversified revenue and healthy AAuM/core PAT CAGR: PL Capital underscored that ICICI AMC has a higher share of non-MF revenue.

The brokerage firm highlighted that the alternative business consists of PMS, AIF and advisory with a combined QAAuM of ₹729.3 billion (Sep’25). Excluding PMS/AIF-related expenses, contribution to revenue for FY25 is better than peers at 9.2%.

"Driven by market share gains, we expect a higher equity AAuM CAGR of 22.7% in FY25-28E versus 20% for the industry. This should result in a core PAT CAGR of 18.5% over FY25-28E, which would be the highest among listed peers," said PL Capital.

5. Valuations: According to PL Capital, at the upper bank of the IPO price, the stock is valued at nearly 27 times, which suggests a discount of nearly 17% to HDFC AMC.

"Over FY25-28E, we expect 23%/21% CAGR in equity/overall AAuM compared to 20%/19% for industry, which would translate to revenue/opex/core income CAGR of 18%, 17% and 18.5%, respectively," said PL Capital.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the broking firm, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.

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