HDFC AMC IPO: India’s second largest fund house HDFC AMC’s IPO to raise up to Rs 2,800 crore got fully subscribed just before the end of first day’s bidding. Th firm had a total issue size of 1.88 crore and saw bids amounting to 1.92 crore, implying a 1.02 times subscription. The issue saw heavy bidding across categories, with QIBs bidding for 1.18 times of their quota of 44.35 lakh shares.
The non-institutional investors recorded relatively lesser demand, bidding for 55% of their quota of 33.26 lakh shares. Retail investors bid for a total of 1.34 times of their quota of 77.62 lakh shares, and the employee category too registered robust demand, with investors bidding for 54% as compared to their quota of 24 lakh shares. The category pertaining to reservation portion shareholders saw bids to the tune of 60% of their quota, data sourced from the exchanges showed.
For its IPO, HDFC AMC has fixed a price band of Rs 1,095 to Rs 1,100 per equity share for its public offer following which the firm has expected to raise Rs 2,800 crore at the upper end of the price band. Notably, this is the 5th listing within the HDFC group of companies. The issue closes on Friday, July 27, 2018. The bid lot has been fixed at 13 shares, and in multiple of 13 thereafter.
“The years ahead for the mutual fund industry are promising with greater financialisation of savings, rising incomes of the Indian middle-class and increased Indian aspirations for a better future. HDFC AMC looks forward to the journey of deepening the penetration of mutual funds in India and setting new market benchmarks,” Deepak Parekh, Chairman of HDFC said last week.
Brokerage firm Motial Oswal saw promising prospects in the issue, on the back of consistent market leadership and superior growth. “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. At the upper price band, HDFC AMC is valued at 32 times FY18 EPS (20% premium to its only listed peer Reliance Nippon AMC), which is justified given the strong parentage, consistent market leadership and superior growth,” Motilal Oswal, which has a subscribe rating on the issue said in a note.