Canara Robeco AMC shares rally 12% after listing. Should you buy, sell or hold the stock? – News Air Insight

Shares of Canara Robeco Asset Management Company showed strong momentum on Thursday, rising as much as 12.3% after listing at a 5% premium over its issue price of Rs 266 per share on NSE. The stock debuted at Rs 280.25 before rising to touch an intraday high of Rs 315, trading over 18% above the issue price.

The Rs 1,326-crore IPO was led by QIBs, with a massive 25.9x subscription, while Non-Institutional Investors (NII) subscribed 6.45x and retail investors bid 1.9x their allotted quota.

What should investors do?

Domestic brokerage firm Prabhudas Lilladher has given a Buy call on the counter and a target price of Rs 320 per share. Analysts remain optimistic about its business prospects, supported by several tailwinds. First, stronger equity market performance could drive higher net equity flow market share (1.3% in H1FY26), which, in turn, may boost its overall stock market share and support an estimated AAuM CAGR of around 20% over FY26–28E — about 3% higher than the industry average.Second, with equities accounting for nearly 90% of total assets, the company is well-positioned to benefit from its positive outlook on Indian equities over the medium to long term, leading to stronger core earnings.

“Investors are advised to book partial profits post-listing, given the decent debut and hold the remaining portion for the long term, as the company’s fundamentals remain strong and the mutual fund industry is poised for continued expansion,” Shivani Nyati of Swastika Investmart said.

“The company is one of India’s oldest and most trusted asset management firms, offering a wide range of mutual fund products across equity, debt, and hybrid categories. With a strong brand legacy and backing from Canara Bank and Robeco Group (Netherlands), the company enjoys high credibility among retail and institutional investors. Canara Robeco has shown consistent growth in its Assets Under Management (AUM), supported by rising investor participation in mutual funds and its expanding distribution network across the country,” she added.

The upper price band of Rs 266 values the company at 19.6x its September 2027 core EPS, compared with 16.7x for UTI AMC and 22.7x for Aditya Birla Sunlife AMC, implying a 42.5% discount to Nippon AMC. Assigning a 24x multiple makes the company an attractive opportunity within the small-cap AMC space.

Canara Robeco AMC, India’s second-oldest mutual fund house, is a joint venture between Canara Bank and Orix Corporation Europe NV. The company manages a diversified portfolio across equity, debt, and hybrid funds, and is known for its consistent profitability and operational efficiency.

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As of March 2025, the company reported Rs 404 crore in total income and Rs 191 crore in PAT, marking a 26% YoY growth. Its EBITDA margin stood at 65.4%, one of the highest among asset managers, while return on net worth (RoNW) was 36%.

At about 11:20 AM, shares of the company were trading at Rs 307.2, up 9.62% from the opening price on the NSE.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)