The initial public offering (IPO) of HDFC AMC was subscribed 5.52 times on Thursday, the second day of the offer with investors bidding for 10.38 crore shares out of the 1.88 crore shares offered to them.
Qualified institutional buyers bid for 5.89 times the shares offered to them, high net worth individuals bid for 13.91 times their allocation, retail investors 3.5 times, and the employees bid 1.03 times.
HDFC AMC is planning to raise around rs2,800 crore from its IPO, for which it had set a price band of Rs 1,095-1,100 per share. When calculated at the upper band of the issue price, the company will be valued at around Rs23,300 crore.
Valuation matrix for the fund management business is the market cap to AUM ratio which is 7.6% for the HDFC AMC. While, Reliance Nippon Life AMC which got listed in November last year, had a market cap to AUM ratio of 4.5% at the time of listing. Typically deals in the mutual funds in
India take place anywhere between 5-7% of the AUM if equity assets are higher or 2-4% of the AUM if debt assets are higher.
The AAUM of HDFC AMC for April-June quarter stood at Rs 3.06 lakh crore, while ICICI Prudential AMC stands at the top position with AAUM of Rs 3.10 lakh crore, suggests the data from Association of Mutual Funds in India (Amfi). However, HDFC AMC is the most profitable fund house in the country, and they had posted net profits of `721.61 crore in the last financial year. The net worth of the company stood at Rs2,159. 68 crore as of March 31, 2018.
As on last financial year, HDFC AMC offered 133 schemes that were classified into 27 equity-oriented schemes, 98 debt schemes (including 72 fixed maturity plans (FMPs)), three liquid schemes, and five other schemes (including exchange-traded schemes and funds of fund schemes).