Incorporated in 1999, Mumbai based HDFC Asset Management Company (HDFC AMC) Limited is well-known fund house engaged in providing savings and investment products. It is a joint venture between Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited (SLI). SLI is part of Standard Life Aberdeen plc., one of the world’s largest investment company.
According to CRISIL, as of December 31, 2017, HDFC AMC has been the most profitable AMC of the country in terms of net profits since Fiscal 2013 with a total AUM (Assets Under Management) of INR 2,932.54 billion. Its profits has grown every year since 2002.
It has been the largest AMC in equity-oriented AUM since the last quarter of Fiscal 2011 and has consistently been among the top two asset management companies in India in terms of total average AUM since the month of August 2008..
HDFC AMC offers a wide range of savings and investment products across asset classes. As of December 31, 2017, it offered 127 schemes categorized into-
- 28 equity-oriented schemes
- 91 debt schemes
- 3 liquid schemes
- 5 other schemes (including exchange-traded schemes and funds of fund schemes).
The company also provides portfolio management and segregated account services to HNIs, family offices, trusts, domestic corporate and provident funds etc. As of December 31, 2017, it managed a total AUM of ₹75.78 billion as part of its portfolio management and segregated account services’ business.
- Brand reputation of HDFC and SLI helps in earning the trust of customers.
2. Consistent investment performance over the years has helped it established itself as one of the leading AMC in the country
3. Diversified product mix with a multi-channel distribution network helps it expand its reach.
4. Strong profitable growth, over the years, provides it with resources to fund future growth.
»» Issue Open: Jul 25, 2018 – Jul 27, 2018
»» Issue Type: Book Built Issue IPO
»» Issue Size: 25,457,555 Equity Shares of Rs 5 aggregating up to Rs 2,800.33 Cr
› Offer for Sale of 25,457,555 Equity Shares of Rs 5 aggregating up to Rs [.] Cr
»» Face Value: Rs 5 Per Equity Share
»» Issue Price: Rs 1095 – Rs 1100 Per Equity Share
»» Market Lot: 13 Shares
»» Minimum Order Quantity: 13 Shares
»» Listing At: BSE, NSE
HDFC AMC has an established track record of delivering robust financial performance. Its total revenue increased from Rs. 903.11 cr. in FY14 to Rs. 1867.25 cr. in FY18 with a CAGR of 19.91%, and net profits has grown from Rs. 357.77 cr. to Rs. 721.62 cr. for the same period at a CAGR of 19.17%. Its Dividend Payout Ratio increased from 41% in Fiscal 2014 to 56% in Fiscal 2018 and has paid a dividend of Rs. 336.89 cr. for FY18 compared to Rs. 126.20 cr. for FY14. As on 31.03.18 its net worth was Rs. 2159.97 cr. Its return on average net worth exceeded 40% every year since Fiscal 2014 and was 40.28% for Fiscal 2018. As on 31.03.18, its equity capital of Rs. 105.28 cr. is supported by free reserves of Rs. 2054+ crore. Being secondary offer, its post issue paid up equity capital remains same at Rs. 105.99 cr. Issue price at the upper band is at a P/E of around 32. For last three fiscals HDFC AMC has posted an average EPS of Rs. 30.42 and average RoNW of 36.51%. As per offer documents, it has shown Reliance Nippon Life AMC as its listed peers that is currently trading at a P/E of around 26 (as on 18.07.18). HDFC AMC is way ahead of its listed peers on many counts except other income. Thus although this issue appears fully priced, HDFC groups fancy among investors across the board, brand image and rewards to stakeholders are at center stage. MF industry set for a big boom ahead and this second largest player set for bright prospects going forward.
One Must apply and hold this gem for long term as far as listing gain also.