LIVE: Canara Robeco shares surge 10% after listing at 5.36% premium to issue price

PL Capital or Prabhudas Lilladher Capital outlined that the company’s performance in the 1-year and 3-year buckets led to healthy net equity flow between FY22-FY23. Since March 2024, the AMC’s weighted average performance in the 1-yr bucket has been improving. If this trend continues, the 3-year bucket would also show improvement, which in turn may lead to higher net inflows. For H1FY26, net flow equity market share stood at 1.3%.

Canara Robeco AMC is a smaller player compared to industry giants, its growth momentum, strong distribution network and equity tilt AUM makes it an interesting player. “Looking ahead, as mutual fund penetration deepens and participation by investors rises, Canara Robeco is well placed to capture the industry tailwinds. Investors interested can invest in the company with a long-term holding view,” said Master Capital Services in an IPO note.

“At the upper price band of Rs266, the stock is valued at 28x FY25 EPS, which appears fair relative to peer multiples. We believe the company is an attractive bet in the small AMC space and has a higher potential to rerate with a slight improvement in the performance of its schemes and yields, as compared to a few other peers, given its retail focus and a higher proportion of equity AUM,” said InCred Equities in a research note.

“We expect superior performance in the 1-year bucket to sustain, which may eventually translate to the 3-year bucket, thereby increasing the net flow market share from 1.3% (H1 FY26) compared to stock market share of 2.6%. This should support higher-than-industry growth from FY26. While we expect industry AAuM CAGR of 17.0% over FY26-28E, for Canara Robeco AMC, we envisage it to be higher at 20% owing to the gain in equity market share,” said Prabhudas Lilladher in a research note.

Being a subsidiary of Canara Bank, Canara Robeco AMC has access to the bank’s branch network and retail customer base, facilitating distribution of MF products across the country, particularly in semi-urban and rural regions.

Canara Bank only sells Canara Robeco AMC products: 99.7% of overall MF sales by the bank are for Canara Robeco MF. On an AAuM basis, share of Canra Robeco AMC AUM is the highest within overall AUM of the bank compared to, AMC subsidiary share in AUM of peer banks.

The AMC’s 1-year weighted alpha improved from August 2019 until December 2020, while the 3-year bucket performance remained strong over July 2019 to January 2023. Hence, the company witnessed strong net equity flows of Rs 14,680 crore and Rs 11,870 crore in FY22 and FY23, suggesting a healthy net flow market share of 9.6% and 9.7% in FY22 and FY23 compared to equity market share of 2.46% and 2.88% in March 2022 and March 2023.

Canara Robeco Asset Management Company sees a striong debut on D’street. The shares listed at 5.36% premium on the NSE at Rs 280.25/share. The listing price on BSE is at Rs 280.25 per share, at 5.66% premium to issue price.

As of June 2025, the company had 52,343 empaneled distribution partners across India, including Canara Bank, 44 other banks, 548 national distributors (NDs) and 51,750 mutual fund distributors (MFDs). The company has a network of 25 branches and 325 employees: 24 in investment, 142 in sales, 14 in operations, 10 in finance, and 52 in customer service.

PL Capital, in its report on Canara Robeco highlighted that “being a bank subsidiary supports positive net flows.” Accordsing to the brokerage house, as subsidiary of Canara Bank (CBK), the AMC benefits from the bank’s widespread branch network and retail customer base, facilitating distribution of MF products across the country.

Canara Bank’s contribution to Canara Robeco AMC AuM is 8% as per PL Capital’s estimates. They pointed out that Canara Bank sells Canara Robeco AMC products since 99.7% of overall MF sales by the bank are for Canara Robeco AMC.

The equity distribution is: direct 23% compared to an industry average of 25.5%.

Monthly Average AUM as of September 2025 was Rs 1.2 lakh crore, with equity share of 90% (highest among peers), which would expose the AMC to equity market movement, making earnings more volatile. “However, this could be an advantage given that we have a positive outlook on Indian equities over the medium and long term due to low penetration in the Indian AMC space. As superior performance translates to higher equity market share, our core earnings estimates face upside risks since markets have given flat to slight negative returns over last 1 year,” said Prabhudas Lilladher in a research note.

Canara Robeco has an integrated digital ecosystem covering various aspects of operations. The company’s automation and digitalisation initiatives are targeted to improve customer convenience, accessibility, digital payment options, customer service, and engagement. Its digital initiatives to attract new customers include an investor mobile application available on Android and iOS platforms, direct investment opportunities through “smarTInvestor – Canara Robeco” available on their website, and the initiation of eKYC.

Prabhudas Lilladher or PL Capital initiates coverage on Canara Robeco with a Buy rating. They have a target price of Rs 320 per share.

The brokerage house is “optimistic about its business prospects given that

-(1) better equity performance could lead to an increase in net equity flow market share (1.3% in H1FY26)

-(2) higher equity share of 90% could lead to higher core earnings as we are positive on Indian equities over the medium & long-term

-(3) telescopic pricing would have a limited impact on equity yields as commission payout is high at 70%+. “

The Canara Robeco IPO saw steady subscription. The issue was subscribed 9.74x. The subscription for the retail category stood at 1.91 times while QIBs were subscribed 25.92x (Ex Anchor). The NII category saw 6.45x subscription

As subsidiary of Canara Bank, the AMC benefits from the bank’s widespread branch network and retail customer base, facilitating distribution of MF products across the country. Canara Bank’s contribution to the AMC’s AUM is 8%. The lender only sells the AMC products since 99.7% of overall MF sales by the bank are for Canara Robeco AMC.

Prabhudas Lilladher has initiated coverage on Canara Robeco AMC with a ‘Buy’ rating. The broker is optimistic about its business prospects, given that the AMC’s better equity performance could lead to an increase in net equity flow market share (1.3% in H1 FY26) and, in turn, improve stock market share, which may translate to AAuM CAGR of 20% over FY26-28 (3% higher than industry).

Canara Robeco Asset Management Company is a well-established and trusted brand with a long-standing legacy and strong institutional backing. The company is all set to list on the exchanges today, October 16. The firm’s operations are guided by a seasoned professional management team and supported by robust corporate governance practices. The company offers a well-diversified portfolio of equity products driven by a rigorous, research-based investment approach.