The initial public offering of HDFC Asset Management Co Ltd was fully subscribed on the first day of the issue on Wednesday, with investors across categories making a beeline to buy shares of India’s second-largest mutual fund house.
The offering of 18.8 million shares was completely covered by 4:45 pm, stock-exchange data show.
Ahead of the IPO, the company raised Rs 731.85 crore ($106 million) on Tuesday by allotting 6.65 million shares at the upper end of the Rs 1,095-1,100 price band to 35 anchor investors.
The anchor investors included a homegrown private equity firm, a sovereign wealth fund, a number of foreign portfolio investors and hedge funds as well as domestic alternative investment funds and mutual funds also bought shares.
HDFC AMC is seeking a valuation of as much as Rs 23,161 crore ($3.4 billion) through the IPO that will close on Friday. 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.
The IPO is the second ever by a mutual fund company after Reliance Nippon Life Asset Management Co went public last year. 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 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%. 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.
HDFC AMC has appointed a dozen bankers to manage the share sale. These are 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.
