Just days after Deepak Parekh said that Housing Development Finance Corp. Ltd is looking to list its mutual fund unit in 2018, HDFC group today approved an offer for sale via IPO. Post stake dilution, HDFC will hold 50.01% in the AMC business, while Standard Life will hold 24.99% in HDFC AMC upon dilution.
“We are listing it (the asset management business) in the first quarter,” Parekh said in an interview to livemint earlier this month. HDFC Asset Management Co. Ltd managed average assets of Rs 2.69 trillion in the quarter ended September. Post listing, HDFC will become the second asset management company to list in India after Reliance Nippon Asset Management Co. Ltd, whose IPO saw was subscribed 81.45 times in October this year.
“The size of the offer, price and other details of the proposed IPO will be determined in due course,” HDFC Mutual Fund said in an exchange filing. Earlier this month, the group had launched the IPO of its life insurance business, HDFC Life, the first offering by HDFC group after 22 years. The near Rs 8,700 crore public offer saw total bids amounting to 1,06,80,78,500 shares as against the total issue of 21,97,59,218 shares, implying a subscription of nearly five times. Notably, Deepak Parekh had pointed out that the IPO was priced lower than peers.
“We have priced it lower because there is fatigue in the market. Insurance firms have not done well. The response has not been good,” he had said before launch of the IPO. Earlier last week, HDFC Standard Life share price gained as much as 27.24% to hit the listing day high of Rs 369 on BSE. The shares closed at Rs 372 on NSE today, down by more than 1.7% since yesterday’s close on NSE.