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Sebi puts Aditya Birla AMC's IPO on hold

The capital market regulator Sebi has put the approval of the initial public offering (IPO) of Aditya Birla Asset Management Company on hold for a month.

IMAC announces closing of $200 mn IPO
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IMAC announces closing of $200 mn IPO

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Mumbai: The capital market regulator Sebi has put the approval of the initial public offering (IPO) of Aditya Birla Asset Management Company on hold for a month.

The reason as cited by Sebi is that one of Aditya Birla group companies is currently facing an investigation.

"The company's draft red herring prospectus has been put in abeyance", the one-line statement by Sebi notice said. The regulator hasn't furnished any detail for its move.

The IPO approval has been put on hold for 30 days since Sebi has issued a show-cause notice to a subsidiary of Aditya Birla Capital Ltd, the holding firm, three weeks ago.

It's the process followed when Sebi has an investigation pending against a group company Aditya Birla Finance, which had financed CG Power. Sebi has issued a show-cause notice on that particular deal. A source familiar with the development told Bizz Buzz.

It was in 2016, when Rs50 crore was financed by Aditya Birla Finance (ABF), the non-banking finance arm of the Aditya Birla group, to CG Power. It was further extended by the additional infusion of Rs200 crore later to BILT's arm BILT Graphics Paper Products Ltd, a step-down subsidiary of BILT and some land parcel owned by CG Power was used by ABF, which could later be used for the purpose of repayment. This structure created two special purpose vehicles, namely Blue Garden Estates Pvt Ltd (BGEPL) and Acton Global Ltd (AGL) which is being investigated by Sebi. The Aditya Birla AMC said in a statement that "given the diversified nature of our financial services businesses, there are various regulatory clearances required unrelated to the AMC entity. This approval process is taking longer than expected and we are working with SEBI on the next steps of the IPO process."

The fund house, which ranks fourth in the ranking of the fund houses in the country in terms of asset size, (after SBI, HDFC and ICICI) had filed its DRHP on April 19. The regulator sought a clarification and company responded on June 9. The fund house had already kickstarted roadshow for the IPO as it is looking at a valuation of around Rs 23,000 crore or more.

Aditya Birla Capital and its partner Sun Life Asset Management Co planned to sell 13.5 per cent stake in the IPO. Aditya Birla Capital is the parent of Aditya Birla AMC and Aditya Birla Finance. SBI MF is also planning to come up with its IPO sometime later. However, the details are yet to be furnished by the fund house. As of now, UTI MF, HDFC MF and Nippon MF are the only listed fund houses.

Kumud Das
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