HDFC Asset Management Company's Rs 2,800 crore IPO opened today. The IPO carries price band of Rs 1,095 to 1,100 per share. The issue size comprises 2.5 crore equity shares which includes 8,59,2,970 (4.08 per cent stake) equity shares by HDFC Ltd and 16,864,585 (7.95 per cent stake) equity shares by Standard Life Investments.
We look at five things to know about the firm launching one of the biggest IPOs in India this year.
- HDFC Asset Management Co (HDFC AMC) is the asset management arm of the HDFC Ltd (promoter) and was established in 1999. In 2001, Standard Life Investments acquired 26% stake in HDFC AMC. It is the most profitable AMC and the second-largest in terms of asset under management (AUM) with 14% market share. HDFC AMC is an investment manager to HDFC Mutual Fund and also provides portfolio management (PMS) services. Under mutual fund business, it offers a wide range of investment schemes across asset classes catering to various risk return profiles.
- As of March 31, 2018, HDFC AMC's equity-oriented AUM and non -equity -oriented AUM constituted Rs 1, 49,713 crore and Rs 1,42,273 crore, respectively, of its total AUM. Its actively managed equity-oriented AUM (which excludes index linked and arbitrage schemes) constituted Rs 1,44,925 crore of total AUM as of March 31, 201 8. As of March 2018, HDFC AMC had the highest market share of equity AUM (15.8%) followed by ICICI Prudential AMC based on quarterly average AUM. Also, on retail AUM market share (ex -HNI AUM), the company enjoys market leadership with an overall market share of 13.7%. As on March 2018, it managed AUM of Rs 2,91,985 crore out of which 51% was equity AUM. It has grown its AUM at a CAGR of 25.5% over FY 2013-18.
- Its AUM has grown at a CAGR of 33.9 % since fiscal 2001 and has been the largest asset management company in India in terms of 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. Its AUM has grown at a compounded annual growth rate ("CAGR") of 25.5% between March 31, 2013 and March 31, 2018.
- HDFC AMC's net profit rose from Rs 550.25 crore in FY 17 to Rs 721.62 crore in FY 18, translating into 31.14% rise in the key metric. Its revenue from operations rose to Rs 1,759.75 crore in FY 18 compared to Rs 1,480 crore in FY 17. Operating revenue has grown at CAGR of 20% over FY13 -18 at Rs 1750 crore while total expenses have grown at CAGR of 19% over same period. Profit after tax has grown at CAGR of 17.8% over FY13 -18 at Rs 720 crore.
- HDFC Mutual fund offers 133 schemes that are classified into 27 equity -oriented schemes, 98 debt schemes (including 72 fixed maturity plans) and 3 liquid schemes, and 5 other schemes (including exchange-traded schemes and funds of fund schemes). It also provides portfolio management and segregated account services (PMS), including discretionary, non -discretionary and advisory services, to high net worth individuals (HNIs), family offices, domestic corporates, trusts, provident funds and domestic and global institutions.
Written and edited by Aseem Thapliyal