Key things about HDFC AMC IPO

HDFC AMC operates as a joint venture between Housing Development Finance Corporation Ltd and Standard Life Investments Ltd.

Jul 19, 2018 09:07 IST India Infoline News Service

HDFC Asset Management Company Ltd IPO

Offer details
Issue opens – 25-Jul-2018, Issue closes – 27-Jul-2018
Price band – Rs1,095-1,100/share
Face Value- Rs 5/share
Public Offer: ~2.55 cr shares

a) HDFC AMC Emp-3.2lakh shares
b) HDFC Emp- 5.6 lakh shares
c) HDFC Shareholder-24lakh shares
Net Offer- ~2.22cr shares
Bid Lot- 13 Equity shares
Issue Type- 100% Book Building

% shareholding Pre IPO Post IPO
Promoter 94.95 82.94
Public 5.05 17.06
Source: RHP

Post issue Market Cap: ~Rs23,319cr (at upper band)
Issue size – ~Rs2,800cr (at upper band)

About HDFC AMC Ltd

HDFC AMC operates as a joint venture between Housing Development Finance Corporation Ltd and Standard Life Investments Ltd. As of March 31, 2018, its equity-oriented AUM and non-equity-oriented AUM constituted Rs1,49,713cr and Rs1,42,273cr respectively of its total AUM. Its AUM has grown at a CAGR of 25.5% between March 31, 2013 and March 31, 2018.

Its proportion of equity-oriented AUM to total AUM was at 51.3%, which is higher than the industry average of 43.2%, as of March 31, 2018, according to CRISIL. As equity-oriented schemes generally have a higher fee structure compared to non-equity-oriented schemes, according to CRISIL, its product mix helps it to achieve higher profits.

Large suite of savings and investment products

As of March 31, 2018, it offered 133 schemes that were classified into 27 equity-oriented schemes, 98 debt schemes (including 72 fixed maturity plans), three liquid schemes and five other schemes (including exchange-traded schemes and funds of fund schemes).

This diversified product mix provides it with the flexibility to operate successfully across various market cycles, cater to a wide range of customers from individuals to institutions, address market fluctuations, reduce concentration risk in a particular asset class and work with diverse sets of distribution partners, which helps it expand its reach.

Competitive Strengths

• Consistent market leadership position in the Indian mutual fund industry
• Trusted brand and strong parentage
• Strong investment performance supported by comprehensive investment philosophy and risk management
• Superior and diversified product mix distributed through a multi-channel distribution network

• Maintain strong investment performance
• Expand its reach and distribution channels
• Enhance product portfolio
• Invest in digital platforms to establish leadership in the growing digital space

Above information summarizes a few key points related to the issue and should not be treated as a comprehensive summary. Investors are requested to refer the Red Herring Prospectus for further details regarding the issue, the issuer company and the risk factors before taking any investment decision. Please note that investment in securities is subject to risks including loss of principal amount and past performance is not indicative of future performance. Nothing herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so. The above information is not intended to be an advertisement and does not constitute an invitation or form any part of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever. Further, IIFL Holdings Ltd is one of the Book running lead managers to the issue.   

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