The HDFC Asset Management Company Ltd is going to come out with its initial public offering (IPO) on 25 July 2018. It is the second largest asset management company in India and a joint venture between housing finance lender HDFC (Housing Development Finance Corp Ltd) and Standard Life Investments Ltd. The shares are proposed to be listed on BSE as well as NSE.
Here are a few things that you should know about the upcoming IPO:
- As of 31 March, its assets under management (AUM) stood at Rs 2.91 trillion, which includes Rs 1.49 trillion equity-oriented and Rs 1.42 trillion non-equity oriented AUM. It is the second AMC in India to go public after Reliance Nippon Life AMC.
- The issue is open between 25 July and 27 July. It is issued at a price bandwidth of Rs 1,095-1,100 a piece valuing HDFC AMC at Rs 23,319 crore at the upper end of the valuation.
- The HDFC AMC IPO is offering 2.54 crore equity shares that include 4.08 percent (85.92 lakh shares) of the stakeholding in the company from HDFC and 7.95 percent (1.68 crore shares) stake from Standard Life.
- As a retail investor, you can apply for a maximum of Rs 2 lakh in the category with a minimum lot size of 13 shares.
- According to a note from ICICI Securities, a reservation of 9.43 percent of the total HDFC AMC offer size is made for all HDFC shareholders as of 14 March 2018. A 1.26 percent and 2.2 percent reservation is also made for the employees of HDFC AMC and HDFC respectively.
- HDFC AMC reported a 31 percent increase in its net profit for the financial year 2017-18 at Rs 722.61 crore from Rs 550.24 crore in the previous year. Its total revenue surged by 17.6 percent on a year-on-year basis to Rs 1,867.24 crore.
- According to a CRISIL report, HDF AMC has been the most profitable AMC as of 31 December 2017 in terms of its net profits since 2013. Its net profits have been growing every year since 2002.
- Brokerage Motilal Oswal Securities have given a "subscribe" recommendation for the IPO. "Favourable perception of HDFC AMC brand, higher mix of high-margin equity oriented AUM, consistent RoE of 40%, a wide distribution network and increasing dividend payouts work in HDFC AMC's favour," it said.