ICICI Bank to Raise 2% Stake in ICICI Prudential Asset Management Company: Here’s Why

Mumbai, June 27, 2025 — In a move that signals growing confidence in the asset management business, ICICI Bank, one of India's largest private sector lenders, has announced plans to acquire an additional 2% stake in ICICI Prudential Asset Management Company (ICICI Pru AMC). The strategic move reaffirms the bank’s commitment to strengthening its footprint in the country’s rapidly expanding mutual fund industry, which has seen exponential growth over the last few years.

A Strategic Stake Enhancement

According to a regulatory filing with the BSE, ICICI Bank currently holds a 51% stake in ICICI Pru AMC through its joint venture with Prudential Corporation Holdings Limited (UK). The proposed acquisition will raise the bank’s total stake to 53%, consolidating its majority ownership.

The transaction, subject to regulatory approvals, is expected to be completed in two tranches, and is likely to take place over the next few months. The deal consideration, though not officially disclosed, is estimated to be around ₹750-₹800 crore, based on current market valuations.

Why ICICI Bank Is Doubling Down on AMC Business

The decision to increase the stake is rooted in multiple factors:

1. Robust Growth in AUM: ICICI Pru AMC is the second-largest asset management company in India by assets under management (AUM), boasting an AUM of over ₹6.25 lakh crore as of May 2025. Its diversified product offerings and consistent fund performance have helped it gain significant investor trust.

2. Wealth Management Synergy: As ICICI Bank deepens its focus on wealth management and retail financial services, strengthening control over the AMC business enhances product integration and cross-selling capabilities across banking and investment platforms.

3. Long-Term Value Creation: With India’s mutual fund industry witnessing double-digit growth annually, owning a higher stake in a profitable and growing AMC offers long-term revenue diversification and shareholder value enhancement.

“The move indicates ICICI Bank’s confidence in the mutual fund space as a key growth engine. It allows greater strategic alignment between banking and investment services,” said Kunal Shah, Senior Analyst at Edelweiss Securities.

Market Context: Mutual Fund Industry on an Uptrend

The Indian mutual fund industry has been on a steep upward trajectory, driven by increased retail participation, SIP (Systematic Investment Plan) inflows, and a growing investor awareness about financial planning. As of May 2025, the industry’s total AUM crossed ₹58 lakh crore, with ICICI Pru AMC capturing over 10% market share.

Moreover, the rising penetration of digital investment platforms, fueled by Gen Z and millennial investors, has significantly boosted inflows into mutual fund products, particularly passive funds and index-linked ETFs.

“ICICI Pru AMC has maintained a strong fund performance history and has also been agile in launching innovative passive products, making it well-positioned to benefit from the digital investment wave,” said Sonal Verma, Fund Industry Expert and Director at Morningstar India.

ICICI Pru AMC: A Snapshot

• AUM: ₹6.25 lakh crore (as of May 2025)

• Top Funds: ICICI Prudential Bluechip Fund, Balanced Advantage Fund, and Bharat 22 ETF

• Net Profit FY25: Estimated at ₹1,250 crore

• Customer Base: Over 1.4 crore investors

• Distribution Network: Present in over 300 cities, with strong digital reach

ICICI Pru AMC has also diversified its offerings into alternative investment funds (AIFs) and retirement solutions, reflecting a comprehensive approach to wealth creation.

Regulatory and Structural Implications

The transaction will not alter the joint venture structure in any fundamental way, as Prudential Corporation will continue to hold the remaining 47% stake. However, ICICI Bank's enhanced control will likely allow greater say in strategic decisions, capital allocation, and expansion initiatives.

The acquisition is subject to clearance from:

• Securities and Exchange Board of India (SEBI)

• Reserve Bank of India (RBI)

• Other applicable regulatory bodies

What This Means for Investors

For retail investors and market participants, the move is a positive signal for both ICICI Bank and ICICI Pru AMC shareholders. Increased stakeholding by the parent signals confidence in the future performance and profitability of the AMC.

“This could be an accretive move for ICICI Bank in the medium to long term, given the high margin nature of the AMC business and its scalability,” commented Ravi Menon, Fund Manager at Axis Capital.

From an investment standpoint:

• ICICI Bank shares may see re-rating potential based on consolidated earnings boost.

• ICICI Pru AMC could benefit from stronger strategic backing, improved governance, and potentially expanded digital outreach.

ICICI Bank’s decision to raise its stake in ICICI Prudential Asset Management Company underscores a broader trend of banks looking to deepen their wealth management ecosystems. With mutual funds becoming central to financial planning in India, owning a larger pie of a top-performing AMC can be a long-term game-changer.

As India marches towards becoming a $10 trillion economy by the next decade, financial services like asset management are poised to flourish—and ICICI Bank seems ready to capitalise on this future.