HDFC AMC slips as Standard Life to sell 2.23% stake

HDFC Asset Management Company declined 1.05% to Rs 3404.80 as one of its promoters, Standard Life Investments, will offload 2.23% stake in the fund house on 4-5 December.

Standard Life Investments has proposed to sell up to 47.50 lakh equity shares, representing 2.23% of the total issued and paid-up equity share capital of HDFC AMC through offer-for-sale (OFS) mechanism. Besides, there will be an option to additionally sell up to 38.50 lakh equity shares, amounting to 1.81% stake of the fund house.

The stake-sale will be conducted on the BSE and NSE on 4 December for institutional investors and 5 December for retail investors. The floor price for the sale has been set at Rs 3,170 per equity share. The announcement was made post trading hours yesterday, 4 December 2019.

The share-sale is being undertaken by the promoter for achieving the minimum public shareholding in the company as prescribed under markets regulator Sebi's norm.

As of September 2019, Standard Life held 29.94% stake in the mutual fund house, while HDFC owned 52.76%. Total promoter holding in the company stood at 82.70%.

HDFC AMC's net profit surged 78.8% to Rs 368.24 crore on a 6.6% rise in total income to Rs 549.07 crore in Q2 September 2019 over Q2 September 2018.

On the technical front, the stock's RSI (relative strength index) stood 51.65. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading above its 50-day placed at Rs 3105.77 and its 200-day moving average (DMA) placed at Rs 2156.48.

HDFC Asset Management Company (HDFC AMC), investment manager to HDFC Mutual Fund, is one of the leading asset management companies in the country. The company operates as a joint venture between Housing Development Finance Corporation (HDFC) and Standard Life Investments (SLI).

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