HDFC AMC sets IPO price band at Rs 1,095-1,100; public issue to open on 25 July

New Delhi: HDFC Asset Management Company, the country’s second-largest mutual fund firm, has fixed a price band of Rs 1,095-1,100 per share for its initial public offering, through which it is estimated to garner Rs 2,800 crore. The initial share-sale offer will be open for public subscription from July 25 to 27, HDFC said in a regulatory filing to stock exchanges. HDFC AMC operates as a joint venture between Housing Development Finance Corporation (HDFC) and Standard Life Investments. Going by the draft papers, the proposed initial public offer (IPO) offers up to 2.54 crore equity shares of the fund house through an offer for sale of 85.92 lakh shares by HDFC and up to 1.68 crore shares by Standard Life. HDFC AMC is selling 4.08 percent stake in the IPO, while Standard Life will offload 7.95 percent holding. [caption id=“attachment_4386723” align=“alignleft” width=“380”] Representational image.[/caption] “The price band for the IPO has been fixed at Rs 1,095 to Rs 1,100 per equity share of face value Rs 5 each of HDFC AMC and that the minimum bid lot for the IPO has been fixed at 13 equity shares and applications may be made in multiples of 13 equity shares thereafter,” HDFC said. At the upper end of the price band, the public issue is expected to garner Rs 2,800 crore. HDFC AMC, which has a total asset under management of over Rs 3 lakh crore at the end of March, is the country’s second-largest fund house after ICICI Prudential AMC that has an asset base of Rs 3.06 lakh crore during the same period. It will become the second AMC to hit the markets after Reliance Nippon Life AMC, which had raised Rs 1,542 crore last year. Nomura Financial Advisory and Securities (India), Kotak Mahindra Capital, Axis Capital, BofA Merrill Lynch, Citigroup Global Markets India, CLSA India, HDFC Bank, ICICI Securities, IIFL Holdings, JM Financial, JP Morgan India, Morgan Stanley India are the book running lead managers to the issue. Last month, markets regulator Sebi had given clearance to the fund house to float its initial share-sale. Earlier, the regulator had kept the company’s proposed IPO in abeyance for examination of past violations. Earlier, Sebi had asked HDFC AMC to cancel the shares allotted to distributors and advisers. It had directed the fund house to return the money it had collected from distributors and independent financial advisers, at the rate of 12 percent, according to industry insiders. The fund house had made a private placement of shares to the tune of Rs 150 crore to 140 distributors in April this year. These shares were offered at Rs 1,050 per share. Though it had offered stocks to nearly 200 distributors, only 140 subscribed, they added.