HDFC Asset Management Company (AMC) on Thursday announced its plans for an initial public offering (IPO).
HDFC Asset Management Company (AMC) on Thursday announced its plans for an initial public offering (IPO). Housing Development Finance Corporation and Standard Life Investments (SLI) approved the IPO of HDFC AMC and will be offering shares to the public through the offer. Post the dilution, the shareholding of HDFC and SLI in HDFC AMC will be at least 50.01% and 24.99%, respectively. Standard Life Aberdeen Plc (SLI’s parent company), HDFC and HDFC AMC also confirmed that it was their intention to enter into a collaboration. Usually an asset management company goes for an IPO for visibility in the market, said a fund manager on condition of anonymity. “Investors are interested in the price discovery of an AMC, there are benefits of ESOP and promoters are interested to monetise. These are the main reasons why an AMC would apply for an IPO,” added the fund manager.
Reliance Nippon Asset Management Company being the only listed asset management company, its an advantage for people investing in IPO of HDFC Asset Management Company, said an analyst on condition of anonymity. According to the Association of Mutual Funds of India (AMFI), HDFC Mutual Fund is the second largest AMC in the country with `2.69 lakh crore of assets under management. “We believe that the listing would unlock value of the business for the shareholders and provide investors an opportunity to participate in the emerging Asset Management space within our group,” said Deepak Parekh, chairman of HDFC AMC.
“The Indian Asset Management industry has seen strong business flows with increasing awareness of mutual fund products. The improving penetration levels of mutual fund products provide an interesting opportunity to channelise investments more productively,” said Milind Barve, managing director of HDFC AMC. HDFC AMC manages a total average AUM of Rs 2.69 lakh crore, of which Rs 1.19 lakh crore was in Equity Oriented Funds for the quarter ended September 2017. HDFC AMC has a diversified fund mix across equity and fixed income. It also has a countrywide network of branches along with a diversified distribution network comprising banks, independent financial advisors and national distributors.