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Aditya Birla Sun Life tanks 12% in 2 days; stock hits record low


Shares of Aditya Birla Sun Life AMC plunged 8 per cent to hit a new low of Rs 312 on the BSE in Monday’s intra-day trade. In the last two trading days, the AMC’s stock fell 12 per cent after it classified capital gains arising from sale of debt mutual funds as short-term capital gains.

Aditya Birla Sun Life AMC (ABSLAMC), the investment manager of Aditya Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and Sun Life Financial Inc. of Canada.

With the fall in the last two days, the stock has fallen 56 per cent from its issue price of Rs 712 per share. ABSLAMC made its stock market debut on October 11, 2021. It had raised Rs 2,768 crore through an initial public offering (IPO).

ABSLAMC also operates a number of alternative strategies including portfolio management services, real estate investments and alternative investment funds. ABSLAMC is one of the leading asset managers in India with a pan India presence in over 280 locations serving approximately 8.1 million investor folios and assets under management of Rs 2,817 billion for the quarter ending December 31, 2022 Quarterly average assets under (QAAUM). Mutual Fund Suite.

The Finance Bill 2023 has introduced an amendment that will classify capital gains from debt mutual funds as short-term capital gains only. As per the proposal, debt funds (those having 35 per cent or less of AUM in domestic equity) will not get any indexation benefit for 3 years or more.

Earlier, debt funds held for 3 years or more were taxed at long-term capital gains (LTCG) rate of 20 per cent with indexation or 10 per cent without indexation. With this amendment, investments in debt mutual funds will be taxed at normal slab rates.
The probable motive behind the move is to reduce arbitrage between fixed deposits and debt MFs. However, the stock reaction seems unfair as the impact on net debt flows and overall earnings may not be significant as debt MFs offer more flexibility and a compounding cash flow advantage. Analysts at Prabhudas Lilladher said while we do not expect a significant change in corporate credit flows, some impact may be seen in HNI flows.

In terms of listed AMCs, the loan contribution to the AUM for HDFC / Nippon / ABSL / UTI is 27 per cent / 23 per cent / 36 per cent / 15 per cent. Hence, UTI AMC will be least affected, while ABSL will be most affected, the brokerage firm said.

first published: 27 March 2023 | 2:57 pm First


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