HDFC AMC Shares Surge 65% on Stock Market Debut

HDFC Asset Management Company Ltd. listed at a premium of 65 percent at Rs 1,815 per share on the National Stock Exchange Ltd., compared to its issue price of Rs 1,100. The stock made its trading debut at Rs 1,818 on the BSE Ltd.

The Rs 2,800-crore initial public offering by the country’s second-largest asset manager was subscribed 83 times on the last day of the bidding led by demand from non-institutional investors.

The public offer comprised 2,54,57,555 shares, including an anchor portion of 66,53,265 shares. The non-institutional investors’ category received over 195 times more demand than the shares on offer. The segment reserved for qualified institutional buyers got subscribed over 192 times, according to lead manager Axis Capital. The retail investor segment was subscribed 6.61 times.

“The behavioral change that’s sweeping over India in the last four years is bringing a pool of money into mutual funds,” Milind Barve, managing director of HDFC AMC told BloombergQuint in an interview. The MF industry is collecting on average Rs 7,500 crore per month from systematic investment plans, he added.

SIPs have emerged as the most powerful tool.

Milind Barve, Managing Director, HDFC AMC

HDFC AMC operates as a joint venture between Housing Development Finance Corporation and Standard Life Investments. It has total assets under management of over Rs 3 lakh crore as of March end.

This is the second asset management company to hit the market after Reliance Nippon Life AMC, which had raised Rs 1,542 crore last year.

HDFC AMC’s Financials

• The company’s net worth stood at Rs 2,160 crore for the year ended March, which translated into a book value per share of Rs 102.
• Its asset under management during the period grew at an annualised rate of 27.5 percent.
• HDFC AMC’s revenue clocked a compounded annual growth rate of 19.7 percent and net profit rose at 19.2 percent over the last five financial years.
• The company has been paying dividend on a regular basis for the last five years.

Money Managed by HDFC AMC

HDFC AMC has 51 percent of its assets under management in equity-oriented products, Barve said. “We have the number one market share in equity assets under management which makes us the leader in equity management. We are the country’s second largest institutional investors, after LIC (Life Insurance Corporation of India) of course,” he told Bloomberg Quint.