HDFC AMC IPO opens this week
The IPO of HDFC Asset Management Co. Ltd, or HDFC AMC, will open on 25 July and close on 27 July. Investors can bid for shares of HDFC AMC in the price band of Rs 1,095-1,100 apiece. At the upper end of the price band, the asset manager is valued at Rs 23,319 crore. HDFC AMC, the second largest asset management company in the country, is a joint venture between mortgage lender Housing Development Finance Corp. Ltd (HDFC) and Standard Life Investments Ltd.
The current total assets under management (AUM) of the industry stands at Rs 23 trillion. As of 31 March, HDFC AMC’s assets under management stood at Rs 2.91 trillion, of which equity-oriented AUM and non-equity-oriented AUM constituted Rs 1.49 trillion and Rs 1.42 trillion, respectively. It will become the second AMC to hit the markets after Reliance Nippon Life AMC, which had raised Rs 1,542 crore last year.
Here are 5 things to know about the forthcoming HDFC AMC IPO:
1) Investors can apply up to a maximum of Rs 2 lakh in the retail category, with a lot size of minimum 13 shares and in multiples of 13 thereafter.
2) According to a note from ICICI Securities, HDFC AMC has made a reservation of up to 9.43% of the total offer size for HDFC shareholders. Also, there is a reservation of up to 1.26% and 2.2% of the total offer size for eligible employees of HDFC AMC and HDFC, respectively.
3) All HDFC shareholders as on March 14, 2018, can make three applications under the HDFC shareholder portion, retail portion and HDFC employee reservation portion/HDFC AMC employee reservation portion (for eligible employees only), according to the note. The maximum bid amount in the HDFC shareholders’ reservation portion by an eligible HDFC shareholder cannot exceed Rs 2 lakh.
(Also read: HDFC AMC said to have priced its IPO lower than market expectation)
4) HDFC AMC IPO offers up to 2.54 crore equity shares of the fund house through an offer for sale of 85.92 lakh shares (4.08 per cent stake) by HDFC and up to 1.68 crore shares (7.95 per cent holding) by Standard Life.
5) HDFC AMC had reported a 31% jump in net profit at Rs 722.61 crore in 2017-18 compared to Rs 550.24 crore in the previous financial year. The company’s total revenue surged 17.6% year-on-year to Rs 1,867.24 crore in 2017-18. Its assets under management have grown at a CAGR of 33.9% since fiscal 2001 and profits at a CAGR of 32.1% since fiscal 2002.
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