HDFC Mutual Fund IPO subscribed 83 times at Rs1,72,000 crore
28 Jul 2018
The initial public offer of HDFC Mutual Fund was subscribed 83 times, with the 18.8 million shares on offer receiving bids for as many as 1.56 billion as investors scrambled to get a piece of the country’s most profitable asset manager.
The offer for 1.56 billion shares is against the IPO size of 18.8 million shares, which excludes the anchor portion. HDFC Asset Management Company on Tuesday already raised Rs732 crore from anchor investors.
The IPO, which opened for subscription on 25 July was subscribed to the tune of Rs1,72,000 crore by 28 July, with the portion reserved for qualified institutional buyers (QIB) getting subscribed 192 times, and those meant for high net-worth individuals (HNIs) getting 195 times subscription. The retail portion was subscribed nearly seven times.
HDFC MF’s Rs2,800 crore IPO is an offer for sale by parent Housing Development Finance Corporation (HDFC) and UK’s Standard Life, who pared 4.05 per cent and 7.96 per cent stake, respectively.
The IPO comprises 2,54,57,555 equity shares, including anchor portion of 6,653,265 shares. This includes sale of up to 85,92,970 equity shares by Housing Development Finance Corporation and up to 1,68,64,585 equity shares by Standard Life Investments.
Investment bankers said this is the second-highest demand for a domestic initial public offer after Coal India, whose Rs15,500 crore mega offer in 2010 had seen bids worth Rs2,00,000 crore.
HDFC MF’s IPO attracted more buyers than last year’s IPO of Avenue Supermarts, which generated bids worth Rs1,40,000 crore. The D-Mart retail chain operator’s Rs1,870 crore IPO was subscribed over 100 times.
HDFC MF manages assets worth Rs3,00,000 crore, of which around 51 per cent are equity assets. HDFC MF is the country’s second-biggest fund house in terms of overall assets and biggest in terms of equity-oriented assets.
HDFC AMC is the joint venture between Housing Development Finance Corporation and Standard Life Investments. It is the second AMC to hit the market after Reliance Nippon Life AMC, which had raised Rs 1,542 crore last year.
The IPO price band was Rs1,095 to Rs1,100 per share. At Rs1,100, HDFC MF is valued at 32 times its 2017-18 earnings and 11 times its 2017-18 book value. The fund house’s market value works out to 7.6 per cent of its AUM.