HDFC AMC gains after OFS receives good response from retail investors

HDFC Asset Management Company (HDFC AMC) rose 0.4% to Rs 2,424.25 after the company's offer for sale (OFS) received good participation from the retail investors on Thursday.

Promoter Standard Life Investment offered to sell a total of 60 lakh shares, or 2.82% stake, through the OFS. The floor price for the OFS was set at Rs 2,362 each, a 6.92% discount to the closing price of Rs 2537.65 on Tuesday.

In the event the oversubscription, Standard Life proposed to sell another 60 lakh equity shares. In total, Standard Life planned to sell 1.20 crore equity shares of HDFC AMC representing 5.64% of total paid-up equity capital of the company.

The OFS opened on Wednesday (17 June) for non-retail investors, while both retail as well as non-retail investors were allowed to subscribe on Thursday (18 June).

As per the base offer, the company had set aside 6 lakh shares of retail investors and 54 lakh shares for non-retail investors. Due to oversubscription, the allocation for each category was doubled i.e. 12 lakh shares for retail investors and 1.08 crore shares of non-retail investors.

On Wednesday (T day), the OFS received subscription for 1,45,63,767 shares or 134.85% against the non-retail offer size of 54 lakh shares.

As on 15:30 IST on Thursday (T+1 day), the OFS received total bids for 13,76,752 shares or 114.73% of the total retail offer size of 12 lakh shares. The non-retail segment received bids for 3,89,561 shares and the retail segment received bids for 9,87,191 shares.

As at end-March 2020, Standard Life Investments held 26.89% stake in HDFC AMC, while Housing Development Finance Corporation (HDFC) owned 52.72%.

HDFC AMC's net profit fell 9.5% to Rs 249.83 crore on a 17.9% fall in total income to Rs 449.62 crore in Q4 March 2020 over Q4 March 2019

HDFC Asset Management Company (AMC) is investment manager to HDFC Mutual Fund. The company has a diversified asset class mix across equity and fixed income/others. It also has a countrywide network of branches along with a diversified distribution network comprising banks, independent financial advisors and national distributors.

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