Many HDFC AMC employees are millionaires now

MUMBAI: With the bumper listing of HDFC AMC on stock exchanges, some of its key employees have become millionaires. At current market price, chief executive officer Milind Barve’s value of shareholding is now Rs 188 cr, while chief investment officer Prashant Jain owns shares worth Rs 161 cr. These officials were allotted shares of the AMC over the last one year.

HDFC AMC’s spectacular debut brings 65% gains

Shares of HDFC Asset Management Company listed at Rs 1,738 on Monday against its offer price of Rs 1,100, and moved up further to end its first day of trading at Rs 1,816, giving IPO investors 65 per cent premium and valuing the company atRs 38,497 crore.

HDFC AMC’s initial public offering, which closed for subscription on July 27, to raise Rs 2,800 crore, received bids worth Rs 1.71 lakh crore and was subscribed 83 times across all categories of investors.

Several IPOs have been performing well on listing in recent times. Investors have more than doubled their money on listing day in IPOs of Astron Paper (128 per cent) in December 2017, Salasar Technology in July 2017 (140 per cent), and Avenue Supermarts (103 per cent) in March 2017.

HDFC Snip 3

HDFC AMC is India’s most profitable fund house. It made a profit of Rs 722 crore for the year ended March 2018 and ranks No. 2 by assets under management in the local mutual fund industry.

Data from Association of Mutual Funds of India showed that HDFC AMC had assets under management (AUM) of Rs 3.06 lakh crore at the end of June 2018. It is the largest asset management company in terms of the more profitable equity-oriented assets. It has a higher proportion of AUM at 51 per cent versus the industry average of 43 per cent.

HDFC Ltd has diluted its share in the AMC by 4.08 per cent through the IPO to about 53 per cent while Standard life has sold 8.1 per cent to bring down its holding in the fund house to 30 per cent.

Analysts believe there is tremendous scope for growth in India’s nascent mutual fund industry. The country’s mutual fund AUM as a percentage of GDP is mere 11 per cent, compared with the world average of 62 per cent, showing tremendous growth potential. Similarly, India’s mutual fund equity AUM as a percentage of market capitalisation is mere 4 per cent compared with 42 per cent in the US and 27 per cent in the UK.

Low penetration, high profitability, a well-diversified suite of products, a strong distribution network, and strong financials make HDFC AMC a preferred choice for investors.

HDFC AMC is only the second listing by an asset management company, after Reliance Nippon Asset Management got listed in November 2017.


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