IPO of HDFC AMC subscribed 82.94 times on final day

By: | Published: July 28, 2018 2:02 AM

The initial public offer (IPO) of HDFC AMC was subscribed 82.94 times on Friday, the last day of the offer with investors bidding for 155.96 crore shares of the 1.88 crore shares offered to them.

hdfc, ipoThe company had set a price band of Rs 1,095-1,100 per share for its IPO.

The initial public offer (IPO) of HDFC AMC was subscribed 82.94 times on Friday, the last day of the offer with investors bidding for 155.96 crore shares of the 1.88 crore shares offered to them.

Qualified Institutional Buyers bid for 192.26 times the shares offered to them, high net worth individuals bid for 195.15 times their allocation, retail investors 6.47 times and employees bid 1.38 times.
HDFC AMC was planning to raise around Rs 2,800 crore from its initial public offer (IPO).

The company had set a price band of Rs 1,095-1,100 per share for its IPO.

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 takes 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 `2,159. 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).

HDFC AMC in its red herring prospectus (RHP) stated that, as of March 31, 2018, their equity-oriented AUM and non-equity-oriented AUM constituted `1.49 lakh crore and `1.42 lakh crore, respectively, of our total AUM.

Their proportion of equity-oriented AUM to total AUM was at 51.3%, which was higher than the industry average of 43.2%, as of March 31, 2018, quoting Crisil in its RHP.

The IPO is an offer for sale (OFS), of 2.5 crore shares.

Promoters of HDFC and Standard Life Investments are selling 85.92 lakh shares and 1.68 crore shares, respectively.

Post the IPO, HDFC’s shareholding will come down to 52.92% from 56.97% and that of Standard Life Investments will come down to 30.03% from 37.98%.

The company will not receive any proceeds from the offer for sale.

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