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HDFC Asset Management Co. Ltd IPO Price, Allotment, Listing, subscription, GMP

HDFC Asset Management Co. Ltd is coming with its Initial Public offer (IPO) on 25 July 2018 and shall remain open for subscription till 27 July 2018. It is the mutual fund joint venture of mortgage lender Housing Development Finance Corp. Ltd (HDFC) and Standard Life Investments Ltd. This IPO is a pure offer for sale, through which HDFC shall offload its 4% stake, whereas Standard Life shall offload 8% of its stake.
 
 The assets under management (AUM) of the company stood at ₹ 2.93 trillion having 127 schemes as of 31 December 2017.
 
The ₹ 3,000 crore IPO is being managed by twelve investment banks namely Axis Capital Ltd., BoA Merrill Lynch, Citigroup Global Market, CLSA India, HDFC Bank, ICICI Securities, IIFL Holding, J. P. Morgan, JM Financial, Kotak Mahindra Capital, Morgan Stanley and Nomura Fin.
 
The IPO is creating a huge fancy among investor community largely due to its HDFC brand and mutual fund industry being seen as a sunrise industry. It shall be the second major asset management company to list on the Indian stock exchanges after Reliance Nippon IPO in October 2017. The Reliance Nippon IPO was oversubscribed by more than 80 times.
HDFC Asset Management Co. Ltd IPO details
Subscription Dates
25-27 July 2018
Price Band in Rupees
1095   to 1100
Minimum bid (lot size)
11 shares
Face Value 
Rs. 5 per share
Retail Allocation
35%
Listing On
NSE, BSE
Grey Market Premium (GMP)
Rs. 360-370
 Competitive Strengths from DRHP
  •         Consistent market leadership position in the Indian mutual fund industry.
  •         Trusted brand and strong parentage
  •         Strong investment performance supported by comprehensive investment philosophy and risk management
  •        Superior and diversified product mix distributed through a multi-channel distribution network
  •         Focus on individual customers and customer centric approach
  •     Consistent profitable growth
  •         Experienced and stable management and investment teams

Strategies of the company as per DRHP
  •  Maintain strong investment performance
  •  Expand our reach and distribution channels
  •  Enhance product portfolio
  • Invest in digital platforms to establish leadership in the growing digital

Summary of risks from DRHP
1. Adverse market fluctuations and/or adverse economic conditions could affect our business in many ways, including by reducing the value of our AUM, causing a decline in our investment management fees, portfolio management fees or fees from advisory services, reducing our systematic transactions, and causing our customers to withdraw their investments, each of which could materially reduce and adversely affect our revenue, business prospects, financial condition and results of operations.
2. If our investment products underperform, our AUM could decline and adversely affect our revenues, reputation and brand.
3. Our AUM may be constrained by the unavailability of appropriate investment opportunities or if we close or discontinue some of our schemes, products and services.
4. Our historical growth rates may not be indicative of our future growth and if we do not manage our growth effectively, our financial performance could be adversely affected.
5. Failure to continue with our existing distribution relationships or to secure new distribution relationships may have a material adverse effect on our competitiveness, financial condition and results of operations.
6. We rely on third-party service providers in several areas of our operations and may not have full control over the services provided by them to us or to our customers.
7. If our techniques for managing risk are ineffective, we may be exposed to material unanticipated losses.
8. We may not be able to implement our growth strategies.
9. Any concentration in our investment portfolio could have a material adverse effect on our business, financial condition and results of operations.
10. We are dependent on the strength of our brand and reputation, as well as the brand and reputation of other HDFC group entities and Standard Life Investments group companies.

2 comments

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