The public offer is of up to 2,54,57,555 equity shares of HDFC Asset Management Company, which consists of an offer for sale of 85,92,970 equity shares by parent company HDFC and 1,68,64,585 shares by other promoter Standard Life Investments Limited, the company said in its DRHP. Of the total issue size, up to 3.2 lakh shares are reserved for HDFC AMC employees and up to 5.6 lakh shares are for HDFC e mployees.Up to 24 lakh shares are reserved for purchase by individual and Hindu Undivided Family shareholders of HDFC as of March 14.
This will make HDFC the second asset management company to list on the exchanges after Life Asset Management, which has a market capitalisation of Rs 15,755 crore.HDFC owns 57.34 per cent in the venture and Standard Life 38.24 per cent, while the rest is held by other investors. Earlier this week, the committee of directors set up by the HDFC board has approved offering up to 8,592,970 equity shares of HDFC AMC at Rs 5 each, representing a 4.08 per cent stake.
After dilution, HDFC would like to hold about 50 per cent in the company. HDFC AMC had an average AUM of Rs 2.89 lakh crore at the end of December 2017. It has 200 branches and more than 1,000 employees and over 55,000 partners across banks, national distributors and independent financial advisors.
HDFC AMC had total revenues of Rs 1,587 crore in the financial year 2016-17. It has the highest profit in the industry. The company has reported a profit of Rs 550 crore in FY17.“Overall, the industry turned more efficient because of lower incremental cost on additional AUM,” the company said in the draft red herring prospectus. “Average profitability of the top five players i mproved by around 400 bps in the past five financial years.”
HDFC Mutual Fund has the highest share of equity assets and its position in the equity category is due to its high market share in the individual investor category that predominantly invests in equity oriented funds.
As of December 2017, HDFC Mutual Fund had the highest market share 16 per cent among individual investors’ assets, followed by ICICI Prudential Mutual Fund 14.7 per cent and Aditya Birla Sun Life Mutual Fund 9.9 per cent. The top five AMCs together had a 58.6 per cent share in individual investors’ AUM.
The mutual fund industry has been a major beneficiary with the switch to financial savings in the last couple of years. The industry’s AUM as a percentage of GDP rose from 5.6 per cent in Fiscal 2000 to 11.6 per cent in Fiscal 2017, and further rose to 12.9 per cent in the first half of Fiscal 2018.
News Source : Economictimes.indiatimesLast modified on Friday, 16 March 2018