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HDFC Asset Management IPO subscribed 5.5 times on day 2

By Ankit Doshi

  • 26 Jul 2018
HDFC Asset Management IPO subscribed 5.5 times on day 2
Credit: Shah Junaid/VCCircle

The initial public offering (IPO) of HDFC Asset Management Co. Ltd continued to attract strong demand on the second day on Thursday, with investors across categories lining up to buy shares of the country’s second-largest mutual fund house.

The offering of 18.8 million shares, excluding the anchor portion, received bids for 103.87 million shares by the end of the second day, stock-exchange data showed. This translates to 5.52 times the demand for shares on offer.

The portion reserved for institutional buyers was subscribed about six times while the quota for retail investors was covered 3.5 times. Non-institutional investors bid for 13.9 times the shares reserved for them.

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The anchor investors included a homegrown private equity firm, a sovereign wealth fund, a number of foreign portfolio investors and hedge funds. Domestic alternative investment funds and mutual funds also bought shares.

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The joint venture of mortgage lender Housing Development Finance Corp and the UK’s Standard Life Investments Ltd is aiming to raise up to Rs 2,800 crore ($409 million) at the upper end of the price band.

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The Rs 1,542-crore share sale of India’s third-largest mutual fund company was subscribed 81 times.

HDFC AMC had filed its draft prospectus for the IPO on 15 March. It received the regulatory nod on 22 June. The offering comprises a sale of 25.45 million shares by HDFC and Standard Life. The mortgage lender will sell 8.59 million shares, or a 4.08% stake, while Standard Life will sell 16.86 million shares through the IPO.

The mortgage lender’s stake in HDFC AMC will drop to 53.28% after the IPO from 57.36% at present. Standard Life’s stake will fall to 30.23% from 38.24%. The company will get three years to meet SEBI’s 25% minimum public shareholding norms.

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HDFC AMC has appointed a dozen bankers to manage the share sale. These include Kotak Mahindra Capital Co, Axis Capital, Bank of America Merrill Lynch, Citigroup Global Markets (India), CLSA India, HDFC Bank, ICICI Securities, IIFL Holdings, JM Financial, JP Morgan India, Morgan Stanley India and Nomura Financial Advisory and Securities India.

The company had Rs 3.06 lakh crore worth of assets under management at the end of June, a tad less than ICICI Prudential Asset Management Co. Ltd’s Rs 3.10 lakh crore, according to the Association of Mutual Funds of India.

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