Shares of HDFC Asset Management Company (AMC) climbed as much as 3 percent in intraday trade on Wednesday to a high of Rs 3,690 apiece.
The surge comes on the back of 3 main factors:
1. Inclusion in MSCI Index
The semi-annual revision of MSCI Global Standard Index, a key benchmark index for India-focused overseas funds, became effective on Wednesday. The index had included HDFC AMC as one of its 8 new additions.
2. Partial-repayment from Essel Group
On Tuesday, HDFC AMC gave an update to the exchanges on its exposure to Non-Convertible Debentures issued by Essel Group.
"The company has received a total of Rs 166.86 crore towards part repayment of the said NCDs and interest thereon, from the issuer through sale of certain listed equity shares comprising part of the collateral. The value of the residual pledged listed equity shares as at November 25, 2019 is Rs 143.95 crore," the fund house said.
3. Morgan Stanley's 'overweight' stance
International brokerage house Morgan Stanley has maintained an 'overweight' stance on HDFC AMC, with a target price of Rs 3,365, based on 40x P/E multiple.
The stock has outperformed benchmark Sensex in the current fiscal year, zooming 134 percent in value till Tuesday. In comparison, Sensex has gained 5.5 percent in the said period.
For the second quarter of 2019-20, HDFC AMC reported a 79 percent year-on-year increase in net profit at Rs 368.3 crore.