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HDFC AMC lists at 58% premium over issue price

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NEW DELHI: HDFC Asset Management Company (HDFC AMC) on Monday made a strong market debut on the bourses, as the scrip got listed at Rs 1,739, a 58.09 per cent premium to its issue price of Rs 1,100 on BSE. On NSE, the scrip got listed at 1,726.25, up 56.93 per cent.The scrip was trading 63.89 per cent higher at Rs 1,811 over issue price on BSE at around 10.15 am. The Rs 2,800 crore initial public offering (IPO) was sold between July 25 and 27, and was subscribed 83 times.

This was strikingly similar to the response received by the issue of peer firm Reliance Nippon Asset Management for its Rs 1,542 crore issue last year.

Data compiled by ETMarkets.com for last five years suggests IPOs receiving similar or higher subscription have, on an average, delivered 56 per cent listing gains.

Given the oversubscription in the HNI category and 11 per cent funding cost for seven days, the breakeven cost for the HNI category would be Rs 1,560 per share, says Jimeet Modi, CEO Founder, Samco Securities.

This meant HNIs needed at least 42 per cent listing gains over the issue price.

HDFC AMC had total assets under management of over Rs 3 lakh crore as of March-end.

The AMC's equity-oriented AUM to total AUM -- at 51.3 per cent -- dwarfs the industry average of 43.2 per cent.

The AMC has 209 branches and a network of over 65,000 distributors.

Strong return ratios, asset light business, higher dividend payout ratio and track record of superior investment performance Kotak Mahindra Capital Company, Axis Capital, DSP Merrill Lynch, Citigroup Global Markets India, CLSA India, HDFC BankNSE -0.40 %, ICICI Securities, IIFL Holdings, JM Financial, J P Morgan India, Morgan Stanley India and Nomura Financial Advisory managed the company's IPO.

HDFC AMC operates as a joint venture between Housing Development Finance Corporation and Standard Life Investments.

Its market share in total industry AUM stood at 13.7 per cent, and that of actively managed equity-oriented at 16.8 per cent.




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