HDFC AMC shares listing day strategy: HDFC AMC shares are all set to debut on the exchanges today and analysts expect a heavy premium. Should you hold shares or book profits? We take a closer look.
HDFC AMC shares listing day strategy: HDFC AMC shares are all set to debut on the exchanges today and analysts expect a heavy premium. Notably, the issue being subscribed 83 times with stellar response from HNIs and QIBs. The portion pertaining to qualified institutional investors was subscribed by 192.26 times during July 25-27. Analysts say that the listing could be at a premium of about 35-40%. Rajat Sharma, Founder, Sana Securities expects listing gains of around 40%. On similar lines, Astha Jain, Senior Research Analyst at HEM Securities said that the issue could list at Rs 1,500 or 37% premium to the issue price of Rs 1,100.
So, what should investors do after listing? “We would like to advise to Hold on listing day as company being consistent & strong financial performer is expected to gain with wider penetration of mutual fund industry in Indian Savings area going forward. However If stock is available during intraday volatility somewhere below Rs 1500 on listing day then we advise to buy. In the long run, we expect 70-80% above issue price return on the stock for time period of a year or more,” Astha Jain told FE Online in a note.
Earlier, many brokerages had advised investors to subscribe to the issue for long term gains. “At upper price band of Rs 1,100 the issue is valued at FY18 P/E of 32x and 8% of AUM which we believe is justified on account of favourable view on HDFC’s brand, higher mix of high-margin equity assets than the industry average, consistent return on equity (RoE) of 40% in the recent past work in the company’s favour. We recommend “Subscribe” to the issue with a long term perspective,” Geojit said in a note.
However, a few analysts are of the view that the issue may be overvalued post listing. “I believe the stock will be extremely overvalued at those levels (post listing at Rs 1,500). In fact it was slightly expensive even in the price band in which it was offered. There is a lot of frenzy around this. Use listing gains to exit if you were lucky enough to get the allotment.” Rajat Sharma of Sana Securities said. HDFC AMC is one of the most awaited IPOs of 2018 and is the 5th listing within the HDFC group of companies. HDFC AMC, the country’s second-largest fund house in terms of average assets under management.