HDFC AMC Limited IPO

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Important Information related to HDFC AMC IPO or HDFC Mutual Fund IPO

(i) HDFC AMC (Asset Management Company) Limited (AMC), also known as HDFC Mutual Fund, was incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000.

(ii) The Company has been the most profitable asset management company in India in terms of net profits since Fiscal 2013, with a total AUM of ₹2,932.54 billion as of December 31, 2017 of which equity-oriented AUM and non-equity-oriented AUM constituted ₹1,552.82 billion and ₹1,379.72 billion.

(iii) The company has been the largest asset management company in India in terms of Equity-oriented AUM since the last quarter of Fiscal 2011 and have consistently been among the top two asset management companies in India in terms of total average AUM since the month of August 2008.

(iv)  The AUM has grown at a Compounded Annual Growth Rate (“CAGR”) of 27.1% between March 31, 2013 and December 31, 2017. The proportion of equity-oriented AUM to total AUM was at 53.0%, which was higher than the industry average of 44.1%, as of December 31, 2017.

(v) The company has an established track record of delivering robust financial performance. The total Revenue increased from ₹7,83.976 Cr in Fiscal 2013 to ₹15,87.910 Cr in Fiscal 2017, with a CAGR of 19.3%, and the Net profit has grown from ₹3,18.746 Cr to ₹5,50.246 Cr during the same period at a CAGR of 14.6%. The Dividend Payout Ratio increased from 40% in Fiscal 2013 to 51% in Fiscal 2017 and they have paid a dividend of ₹2,31.535 Cr in Fiscal 2017 compared to ₹1,11.060 Cr in Fiscal 2013.

Competitive Strengths
a) Consistent market leadership position in the Indian mutual fund industry.
Trusted brand and strong parentage.
b) Strong investment performance supported by comprehensive investment philosophy and risk management.
c) Superior and diversified product mix distributed through a multi-channel distribution network.
d) Focus on individual customers and customer-centric approach.
e) Consistent profitable growth.
f) Experienced and stable management and investment teams.

Objects of the HDFC AMC Limited IPO:

It is a pure OFS vide which existing shareholders i.e HDFC Limited and Standard Life Investment are selling 25,457,555 no. of shares to the Public. 1. HDFC Limited is selling 8,592,970 EQUITY SHARES 2. STANDARD LIFE INVESTMENTS LIMITED selling 16,864,585 EQUITY SHARES.

HDFC AMC Limited IPO Details:

Current GMP: 365-370
Open Date: Jul 25 2018
Close Date: Jul 27 2018
Total Shares: 25,457,555
Face Value: ₹ 5 Per Equity Share
Issue Size: 2800 Cr.
Lot Size: 13 Shares
Issue Price: ₹ 1095-1100 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 06 2018

Promoters And Management:

Promoters of HDFC AMC Limited Company are: (i) The Promoters of the Company are HDFC Limited and Standard Life Investments. As on the date of this Draft Red Herring Prospectus, HDFC holds 120,772,800 Equity Shares and Standard Life Investments holds 80,515,200 Equity Shares, which constitutes 57.36% and 38.24%, respectively, of the Company’s pre-Offer, issued, subscribed and paid-up Equity Share capital.

Capital Structure:

(i) Authorized Share Capital a) 600,000,000 Equity Shares of ₹5 each 300 Cr
b) 50,000,000 preference shares of ₹10 each 50 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue 210,555,200 Equity Shares of ₹5 each 105.2 Cr
(iii) Present Issue OFS to public (  25,457,555 Shares at FV@5) 12.72 Cr
  Which Includes a) HDFC AMC Employee Reservation of 320,000 Equity Shares FV@5 1.25%
b) HDFC Employee Reservation of 560,000 Equity Shares FV@5 2.19%
c) HDFC Shareholders Reservation of 2,400,000 Equity Shares FV@5 9.42%
(iv) Reservation for QIB [11088777 no. of Shares] 43.5%
(v) Reservation for HNI[3326633 no. of Shares] 13%
(vi) Reservation for Retail[7762144 no. of Shares] 30%
(vii) Paid Up Share Capital after the issue 105.2 Cr
 

Financials of HDFC AMC Limited IPO as per DRHP:

1. Assets and Liabilities Key Parameters[STANDALONE]
Year Asset(Cr) Liabilities(Cr) Net Worth(Cr) Book Value D/E [<1.5] RONW debtor days
FY13 829.439 127.539 701.9 278 0.18 45% 9
FY14 1121.336 220.136 901.2 357 0.24 40% 6
FY15 1311.75 191.95 1119.8 444 0.17 37% 6
FY16 1422.717 271.497 1151.22 457 0.24 42% 9
FY17 1599.59 176.69 1422.9 565 0.12 39% 20
9MFY18 2583.158 241.183 2341.975 890 0.10 21% 22
Post Issue 2341.975 111 28%
2. Profit n Loss Key Parameters[STANDALONE]
Year Revenue(Cr) PAT(Cr) EBITDA Margins Profit Margins Outstanding Shares( Cr) EPS
FY13 783.98 318.75 59% 41% 2.5241 126
FY14 903.11 357.77 59% 40% 2.5241 142
FY15 1,064.28 415.50 59% 39% 2.5241 165
FY16 1,494.34 477.88 48% 32% 2.5164 190
FY17 1,587.91 550.25 51% 35% 2.5167 219
9MFY18 1,316.72 495.56 56% 38% 2.6319 188
Post Issue 660 21.05 31
3. Cash Flow Statement(all figures in Cr)[STANDALONE]
Particulars FY17 FY16 FY15 FY14 FY13
(i) Net Cash Generated from Operation 454.86 742.02 94.824 209.47 312.28
(ii) Net Cash Generated from Investment -176.03 -297.07 103.57 -50.801 -94.101
(iii) Net Cash Generated from Financing Activity -278.53 -446.55 -196.87 -158.51 -219.05
(iv) Total[ (i)+(ii)+(iii) ] 0.29 -1.59 1.53 0.16 -0.87
Key Notes: a) The Revenue is growing at CAGR of 17.50% from FY13 to FY18. b) The PAT is growing at CAGR of 15.7% from FY13 to FY18. c) The Annualized EPS for FY17-18 would be 31 d) P/E(post issue)= 35.48 at Cutoff price of 1100 e) P/B(post issue)= 9.09 at cutoff price of 1100 f) The company is almost debt free. g) Mcap/Sales(ideally <2)=13 on FY18 sales( bit higher). h) The Company is consistently clocking EBITDA Margins above 50% in last 5 years.- Big Positive i) The Company is continuously generating positive cash flows from operations in last 5 years- Big Positive. j) The Company has excellent RONW of 28% in FY18( Anything above 25% is super). k) If you observe carefully in the above financials, the EBITDA Margins were decreased from 59%( FY15) to 48%( FY16), this is due to the fact that the other expenses increased by 107.82% FY15 to FY16 , primarily due to an increase in expenses incurred for brokerage, incentives, fees and mutual fund expenses. Until Fiscal 2015, charges associated with brokerage and incentives were recovered from the respective schemes and had no effect Statement of Profit and Loss.

Comparison With Peers:

Name of the Company FV Revenue/AUM Mcap(cr) P/E RONW Mcap/sales NPM
Reliance Nippon 10 0.76 13000 27 22% 8.47 33%
HDFC AMC 5 0.46 23161 35.28 28% 13 38%
NOTE: 1. The AUM of Reliance Nippon is taken as 2.3850 Lac Cr as on 31st May 2018. 2. The AUM of HDFC AMC is taken as 2.93 Lac Cr as on 31st Dec 2017.

Recommendation on HDFC AMC Limited IPO:

HDFC AMC Limited IPO Rating by InvestorZone team = 7/10 1-5: Fair 5-7: Good 7-10: Excellent

Registrar of HDFC AMC Limited IPO:

  1. Karvy Computershare Private Limited

Company Address:

HDFC AMC Limited HDFC House, 2nd Floor, H.T. Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai 400 020, Maharashtra, India. Phone No. +91 (22) 6631 3333 Fax No. +91 (22) 6658 0203 Email: shareholders.relations@hdfcfund.com Website: www.hdfcfund.com

Discussion on HDFC AMC Limited IPO:

    How valuation of AMC businesses in India is calculated??

    >The P/E and P/B valuation tools to measure valuation are not generally true for AMC companies.

    >The AMCs are valued as a percentage of AUM( Asset Under Management). Generally market values company at around 5-6% of the AUM on the higher side.

    >Recently IDFC AMC which was sold to Avendus group at a valuation around 5% of AUM.

    > HDFC AMC IPO is having AUM of 2,93,000 Cr and M.cap of 23161 Cr. So the IPO is valued at 8% of AUM which looks on higher side but hold on as per market pandits, the sale of operation, market leadership, performance and brand also matters a lot. So just can’t gauze valuation by looking at just one parameter.

    > Important point to note is– The AMCs businesses do not get higher valuations as like Life Insurance, banks or general insurance industry. So we have to look the Industry in that perspective before investing.

    01/04/2017 to 31/12/2017 time period ni eps 188 chhe. if we annualize it, it may by 251 rs.. if the total issue is ofs. than there is not question of capital increase. why you have written post issue eps as 31 ? IT SHOULD BE 251/- IF IT IS 251, THAN PREMIUM IS VERY VERY LOW. PLEASE CLEAR THE MATTER.

      Till 9MFY18, the company has issued 26139000 Equity Shares and accordingly EPS was 188. However, on February 7, 2018, the company has issued bonus shares of 78,958,200, so total shares becomes =26139000+78,958,200=105277200. Then on February 13, 2018, the shares got split in the ratio 2:1, so total shares becomes= 105277200*2=210554400.That means at the end of FY18 i.e March 18, total shares outstanding were 21.05 Cr approx. The Annualized profit of the year was at 660 Cr, so EPS would be 660/21.05= 31.35. Hope it clears your doubt.

    Admin ji pls guide

    More than 2 lacs ki application HNI quota me offline kar sakte he..?

      Yes. aap ya toh broker ke paas jake ya phir apne bank ke pass jake form bhar sakte hai. form aapko nse/bse ki website se mil jayega. Appke case main 50,000 se upar ki application hai toh PAN card ki copy lagani hogi. Aur ek baat dhyan rakhiyega agar aap bank se apply kar rahe hai toh us bank main ASBA facility honi chaiye joki aajkal waise sare chote bade banks main hoti hai phir bhi ek baar check kar le.

    For Retail quota—
    Eligible HDFC Shareholders can apply for shares under both the HDFC Shareholders Reservation quota and non-reserved portion (retail quota). However, the maximum shares adding both the category can’t be more than 169 shares else both the applications will be rejected.

    Hdfc amc ipo
    Record date for
    Hdfc share holders to apply was
    14.03.2018
    (I.e 14 march)
    Those who hold in demat on or before 14 march can apply in HDFC share holder quota.

    Apply .One of the most investor friendly group .If alloted keep this as your portfolio stock

    RITES IPO was subscribed 15 times in retail category and the total amount applied by Retail investor was tune to 2500 Cr. Now the total valuation of upcoming HDFC AMC IPO is around 3500 Cr, under which 1225 Cr(35%) is reserved for retail category. So if we consider the brand of HDFC, we expect that Retailers will apply more in HDFC as compared to RITES. Let us suppose Retailers put 4000 Cr application( 60% more than RITES), then retail category can be subscribed around =3.5 times (4000/1225). So chances of allotment is high in HDFC being a large size IPO.

    The issue may be postponed to another two weeks , as SEBI directs HDFC AMC to cancel pre-IPO share sale, and return investors’ capital. Actually HDFC has issued shares worth Rs 150 crore to 140 distributors and advisors at Rs 1,050 per share in April.

    ISSUE OPENS 11TH TO 13TH
    PRICE BANK 1345 TO 1360
    LOT SIZE 11 SHARES
    RETAIL 35%
    HDFC IS A GOOD BRAND VALUE IN STOCK MARKET. IT WILL GIVE LISTING GAIN. APPLY BLINDLY.

    *******Tentative Price of HDFC AMC IPO***********
    Issue Price could be in the range of 1200-1500.

    HDFC AMC IPO is an OFS of 25,457,555 No. of shares wherein HDFC Limited is selling 8,592,970 EQUITY SHARES and STANDARD LIFE INVESTMENTS LIMITED selling 16,864,585 EQUITY SHARES to public.

    *HDFC AMC IPO*

    INITIAL PUBLIC OFFERING OF UP TO *25,457,555* EQUITY SHARES OF FACE VALUE OF 5 EACH.

    RESERVATION

    1. *320,000* SHARES FOR *HDFC AMC EMPLOYEES*

    2. *560,000* SHARES FOR *HDFC LTD. EMPLOYEES*

    3. *2,400,000* SHARES FOR *HDFC LTD. SHAREHOLDERS*

    A *NET OFFER* TO THE PUBLIC OF UP TO *22,177,555* EQUITY SHARES

    HDFC AMC IPO. Below are the final dates for the launch:

    Price Band: July 4th
    Anchor: July 10th
    Issue Opens: July 11th
    Issue Closes: July 13th