Shriram AMC – Waking up after a hibernation. Mcap 300cr

• Business is trading at ~500 crore+ valuation. It is implying an equity AUM of 4,000-5,000 crores

• Can it reach 4,000-5,000 crores Equity AUM even in the next 3-5 years, given the current rate of AUM addition?

  • Should it really be thought of as a startup?? It’s a 20 year old company/business.
  • Start-ups that command exorbitant valuations are disruptive in nature, and grow at exponential rates. Does this company exhibit start-up traits?

• It takes only ~50 crores of networth to get AMC approval - there have been multiple new entrants in the AMC space (eg. Helios MF, Capital Mind etc.). Capital constraint is not as issue, IMO

• Intense competition: Industry is dominated by captive banca-distribution-led AMCs

• The argument on ‘brand name’ seems weak. Shriram brand name is not associated that well in the mutual fund industry

Discl: not invested, tracking