The fund house, among India’s oldest with a 30-year operating history, benefits from the dual parentage of ICICI Bank and Prudential Corporation Holdings. The ₹10,600-crore issue is entirely an offer for sale (OFS) comprising 48.79 million shares and will open on Friday with a price band of ₹2,061–2,165 and close on Tuesday.
While Prudential is divesting more than initially proposed, ICICI Bank recently raised its stake by 2%, ensuring it retains 53% ownership post-listing. This gives the lender enough headroom to remain the asset management company’s (AMC) majority shareholder even after dilution from the newly-created Esop pool.
“When the IPO was first signalled back in February, ICICI Bank had already indicated its intent to retain majority ownership. Even at a 51% stake, they remain the controlling shareholder,” Naveen Kumar Agarwal, chief financial officer at ICICI Prudential AMC, told Mint.
“We have also created a new Esop pool, which will naturally lead to some dilution for existing shareholders. By increasing their stake to 53%, ICICI Bank is simply ensuring that even after the Esop-related dilution in the near future they continue to remain the majority owner.”
Group’s mixed listing history
The AMC’s public offer arrives against the backdrop of the ICICI Group’s uneven listing track record. This is the fourth group entity to list in the past decade, and the previous three—ICICI Prudential Life Insurance, ICICI Lombard General Insurance and ICICI Securities—all debuted at a discount.
ICICI Prudential Life opened in September 2016 at ₹329, below its issue price of ₹334. ICICI Lombard listed a year later at ₹650, again below the IPO price of ₹661. ICICI Securities had the weakest debut, listing 17% lower at ₹431.1 versus the IPO price of ₹520; it was later delisted in March 2025, with shareholders receiving 67 ICICI Bank shares for every 100 shares of the brokerage they held.
With three subdued listings behind it, the market will keenly assess whether ICICI Prudential AMC can break the cycle and set a new precedent for the group.
Balanced portfolio
ICICI Prudential AMC manages the highest number of mutual fund schemes in India, 143 as of September 2025, and has built a diversified product range. Active equity schemes account for 55.8% of its assets under management (AUM), debt and liquid products represent 26.1%, while passive and arbitrage strategies contribute 18%. No single scheme contributes more than 7.1% of total quarterly average assets under management (QAAUM), indicating limited concentration risks.
The AMC has also expanded its alternatives franchise comprising portfolio management services (PMS), alternative investment funds (AIFs) and offshore advisory to ₹72,930 crore, strengthening its presence in higher-yield and differentiated segments. As of September 2025, ICICI Prudential AMC commanded a 13.3% share of the industry’s active mutual fund QAAUM and 13.6% of total equity and equity-oriented assets—consolidating its position as one of the country’s most influential fund management.
“Our focus is to consistently maintain—and gradually strengthen—our market share. Market share is influenced by multiple factors, not just one. If you look at our performance over the past few years, our share has remained stable and has in fact edged up on the equity side. We intend to keep doing what has worked well for us so far, and we believe this disciplined approach will continue to hold us in good stead,” said Naveen Kumar Agarwal.
Prasenjit Paul, equity research analyst at Paul Asset, said the listing represents an important milestone for the industry. “ICICI Prudential AMC’s listing is significant as it brings one of India’s largest AMCs to the public markets,” he noted. “The AMC model’s low capex, high cash generation and operating leverage remains attractive. But with a 100% OFS, investors must judge it purely on valuation and fundamentals.”
Scale and profitability
The AMC has delivered stronger growth than most major peers, recording a 32.7% QAAUM CAGR between FY23 and FY25—outpacing SBI AMC and HDFC AMC. Revenue growth also exceeded rivals, while operating profit expanded at a 20% CAGR. Net profit rose at 32.2% CAGR during the same period, highlighting the strength of its active management franchise despite SEBI’s sustained tightening of mutual fund fee structures.
“As our AUM grows, especially under telescopic pricing, equity (Total Expense Ratio) TERs naturally compress—this is built into the formula. Yet, if you look at our topline, our revenues yield have consistently been around 52 basis points across years,” Agarwal said. “Despite the inherent decline in equity yields due to rising AUM, our mix has benefited from a higher equity component and a growing alternatives business. We are not chasing a specific yield or margin target. Our focus is simply on executing well across all verticals.”
ICICI Prudential AMC’s profitability far exceeds peers: it posted an exceptional 82.8% ROE in FY25, compared with the roughly 30–33% range seen at SBI, HDFC and Kotak AMCs. Its five-year median ROE of 78.9% is also the highest among peers, compared with their typical 23–35% band.
“ICICI Prudential AMC’s best-in-class margin profile is due to its asset mix,” Paul said. “Unlike peers with heavier debt portfolios, ICICI Pru has a higher share of equity and hybrid assets, which earn higher management fees.”
Harshal Dasani, business head at INVasset PMS, said the industry’s pivot toward SIP-driven, long-term investing strengthens the AMC’s competitive position. “Its industry-leading operating margin and RoE stem from disciplined cost structure, a high share of equity and hybrid AUM, and the stability of India’s record SIP ecosystem,” he said. “Over the next few years, the true differentiator will be cost efficiency and distribution depth.”
At the upper end of the price band, the IPO is valued at 40x FY25 earnings—a valuation most analysts consider reasonable relative to other leading players in the sector.
Fee pressure
While the journey may not be smooth as structural threats like regulatory fee tightening remain. With 85% of ICICI Prudential’s total equity AUM in actively managed strategies, SEBI’s proposed adjustments to TER ceilings could exert meaningful pressure. “Over the next 3–5 years, margins may come under pressure as TER ceilings tighten,” Paul said. “By scaling its passive and ETF offerings—where margins are lower but volumes are massive—the company aims to protect overall profit.”
External distributors remain another significant structural issue, capturing the majority of fresh investor capital, particularly from high-net-worth and non-metro segments. Nearly 74% of ICICI Pru’s flows come via external distributors, with individual and institutional mutual fund distributors contributing 37.7%, national distributors 15.8% and banks 19.4% as of September 2025. Experts believe that AMCs must strengthen direct digital channels to avoid over-dependence on traditional distributors.
Meanwhile, the distribution landscape is simultaneously being reshaped by zero-commission digital platforms like Groww and Zerodha, which have dramatically reduced switching friction and challenged traditional channels.
“The surge of direct-first platforms has fundamentally altered distribution,” Dasani said. “For ICICI Prudential AMC, the response lies in leveraging brand trust, competitive track record and a strong digital engagement stack.”
Agarwal emphasised that the AMC’s strategy remains channel-agnostic. “Platforms like Groww and Zerodha are also our distributors—they carry our products just like other channels. Ultimately, what matters is what clients choose to invest in, and that depends entirely on performance.”
Rising financialization
But a shift is underway and giants such as ICICI Prudential are the primary beneficiaries of this structural shift: India’s mutual fund industry is in the midst of its strongest expansion cycle. Quarterly average AUM has surged from ₹38.4 trillion in FY22 to ₹67.4 trillion in FY25, and hit ₹77.1 trillion in the first half of FY26. Forecasts suggest the industry could nearly double to ₹147–155 trillion by FY30.
Despite rapid growth, India remains severely under-penetrated. AUM stands at just 19.9% of GDP—far below China, South Africa, the US and the global average—highlighting decades of potential runway. Despite the recent surge, the most compelling narrative for India’s mutual fund industry remains its profound under-penetration and staggering long-term potential.
“ICICI Prudential AMC’s IPO is significant because it brings one of India’s largest and most recognisable fund houses to the public domain,” Paul said. “The AMC industry structurally benefits from the financialisation of household savings and rising mutual fund penetration. As one of the top players with a large and diversified AUM mix, ICICI Prudential is well-positioned to capture this growth.”
