Highlights: Canara Robeco IPO Day 2 – Bidding continues, GMP up 8%; Key factors investors should watch

The market capitalisation of the Canara Robeco IPO is Rs.5304.50 Cr.

The company focuses on delivering sustained investment performance through a robust research-driven process. Its aim is to grow the distribution and geographical presence. Plus, it also focuses on diversifying the AUM across asset-class and product offerings.

Canara Bank and ORIX Corporation Europe N.V are the company’s promoters.

Retail investors contribute more than 87% of the AMC’s AUM, demonstrating broad participation in individual investment products. Distribution is primarily through Canara Bank’s branches and associated distributors. The firm has also incorporated digital platforms, including mobile applications, to facilitate investor onboarding and product access, complementing physical distribution channels.

Canara Robeco AMC is India’s second oldest asset management company. It became a joint venture in 2007 following an agreement between Canara Bank and ORIX Corporation Europe N.V., under which ORIX acquired a 49% stake, while Canara Bank retained 51% ownership. The company’s product portfolio is predominantly equity-focused, with equity-oriented schemes consistently accounting for over 90% of its total AUM.

As of October 10, 2025, 4:54 PM, the Grey Market Premium for Canara Robeco IPO is Rs. 30. With a price band of Rs. 266, the estimated listing price stands at around Rs. 296.

The company focuses on delivering sustained investment performance through a robust research-driven process. Its aim is to grow the distribution and geographical presence. Plus, it also focuses on diversifying the AUM across asset-class and product offerings.

The Canara Robeco IPO has been subscribed 0.44 times overall so far on Day 2. The retail investors portion was subscribed 0.74 times, while the Non-Institutional Investors (NII) category saw a subscription of 0.53 times.

The AMC place strict importance on maintaining established corporate governance standards, which ensure transparency, accountability, and integrity in their operations, thereby promoting trust among their customers. The company is guided by a robust framework that includes clear policies for risk management and compliance with regulatory requirements. Their governance approach not only protects the interests of their stakeholders but also supports their strategic objectives by promoting ethical behaviour and informed decision-making, which enables them to manage their mutual funds with a focus on delivering sustainable, long-term value to their customers.

“At the upper end of the price band, Canara Robeco AMC is valued at a P/QAAUM of 4.8% and a P/E of 26.4x (based on TTM EPS of Rs 10.1), indicating a fully priced valuation relative to peers. The company has demonstrated consistent growth, supported by Canara Bank’s extensive branch network of over 9,861 branches, which contributes around 8% of its total AUM. With a product mix dominated by equity-oriented schemes (90% of AUM), the AMC remains well-positioned to benefit from rising retail participation in mutual funds. Thus, we assign a ‘Subscribe for Long Term’ rating for this issue,” said Choice Broking Research in an IPO note.

The Canara Robeco IPO is subscribed 0.36 times so far. The public issue subscribed 0.62 times in the retail category, 0.00 times in the QIB category, and 0.40 times in the NII category.

Retail investors contribute more than 87% of the AMC’s AUM, demonstrating broad participation in individual investment products. Distribution is primarily through Canara Bank’s branches and associated distributors. The firm has also incorporated digital platforms, including mobile applications, to facilitate investor onboarding and product access, complementing physical distribution channels.

Canara Robeco AMC is India’s second oldest asset management company. It became a joint venture in 2007 following an agreement between Canara Bank and ORIX Corporation Europe N.V., under which ORIX acquired a 49% stake, while Canara Bank retained 51% ownership. The company’s product portfolio is predominantly equity-focused, with equity-oriented schemes consistently accounting for over 90% of its total AUM.

The Canara Robeco IPO enters Day 2 of bidding. So far, the issue has been subscribed 0.32 times overall, with retail investors showing the most interest at 0.55 times subscription. The NII (non-institutional investors) category has received 0.35 times bids, while the QIB (qualified institutional buyers) portion is yet to see participation. The bidding process remains underway and will stay open till October 13.

The AMC offers a range of mutual fund products across equity, debt, and hybrid categories. It has introduced thematic, multi-asset, and ESG-oriented funds in line with evolving investor preferences. Access to Robeco’s global research provides additional data for designing and managing investment strategies, particularly for differentiated or niche funds.

The AMC offers a range of mutual fund products across equity, debt, and hybrid categories. It has introduced thematic, multi-asset, and ESG-oriented funds in line with evolving investor preferences. Access to Robeco’s global research provides additional data for designing and managing investment strategies, particularly for differentiated or niche funds.

Around 92% of Canara Robeco AUM is in equity-oriented funds (80% equity and 12% hybrid). Around 8% of its AUM comes via Canara Bank. Management sees a comfort zone in keeping that distribution from the parent bank in the range of 8-12%. The strong retail presence and a diversified channel mix enable it to balance its reach, with resilience in client acquisition and retention.

Canara Robeco continues to witness steady growth in the share of AUM contributed by individual investors and through systematic investment plan (SIP) inflows.

“At the upper price band company is valuing at P/E of 27.8x to its FY25 earnings and market cap of Rs 5,304.5 crore post issue of equity shares. We believe that the IPO is fully priced and recommend a ‘Subscribe-Long Term’ rating to the IPO,” said Anand Rathi Research in an IPO note.

Despite a high equity base, its revenue yield stands at 0.39%, leaving a relatively lower buffer to offer further increase in payouts to distributors to stay competitive. However, equity scheme concentration also results in missed flows in fast-growing passive/ETF funds.

Canara Robeco has invested in digitisation to streamline processes such as account opening, transaction execution, and reporting. AI-driven analytics and fintech partnerships aim to improve operational efficiency and reach younger, tech-savvy investors. These initiatives are intended to supplement traditional distribution and potentially reduce costs.

The company focuses on delivering sustained investment performance through a robust research-driven process. Its aim is to grow the distribution and geographical presence. Plus, it also focuses on diversifying the AUM across asset-class and product offerings.

India’s mutual fund sector is projected to expand significantly over the coming decade. Factors driving growth include increasing financial literacy, higher adoption of systematic investment plans (SIPs), and a gradual shift from traditional savings instruments to market-linked financial products.

The company has maintained steady revenue and profitability growth in recent years. EBITDA margins have increased from approximately 55% to over 65%. The AMC operates an asset-light model, which supports free cash flow generation and financial stability. Revenue is primarily derived from management fees on assets under management (AUM), with a significant portion coming from retail clients.

Canara Robeco Asset Management Company (AMC) is one of India’s oldest mutual fund houses, jointly promoted by Canara Bank and Robeco, a global asset manager. The partnership combines public sector backing with international investment expertise. The AMC’s distribution network benefits from Canara Bank’s extensive branch presence, which includes more than 9,800 locations, and partnerships with third-party distributors, allowing access to retail investors in smaller towns and cities.

Proceeds from the fresh issue are likely to be used for:

Expanding the company’s digital investment and distribution platforms

Strengthening data analytics and risk management systems

Enhancing marketing outreach and seeding new fund offerings

Canara Robeco ranks among the Top 10 mutual fund houses in India. Its close association with Canara Bank provides a strong distribution network in smaller towns – an advantage over private players like HDFC AMC or SBI Mutual Fund, which rely more on digital and broker-led channels.

The firm has built a diversified product lineup over the years, offering systematic investment plans (SIPs), exchange-traded funds (ETFs), and sectoral funds. It benefits from Canara Bank’s wide branch network and Robeco’s global investment expertise, which together help it reach both urban and semi-urban markets.

As of September 2025, Canara Robeco’s AUM crossed Rs 90,000 crore, marking a 30% year-on-year growth. Equity funds contribute roughly 55%, debt funds 35%, and hybrid or other categories about 10% of the total mix.

The company has reported consistent double-digit revenue growth in FY25, supported by a higher share of equity-oriented assets. Net profit margins have stayed above 25%, reflecting operational efficiency and a balanced product portfolio.

The IPO will include both a Fresh Issue – to raise funds for expansion and an Offer for Sale (OFS), allowing existing shareholders to sell a portion of their holdings. The promoters, Canara Bank and Robeco, are expected to partially divest their stakes through this offering. Final details will depend on SEBI approval and the company’s draft red herring prospectus (DRHP).