HDFC AMC may soon the hit the primary market with its IPO. SEBI has given its go ahead to HDFC AMC to issue IPO, said two senior officials from the fund house requesting anonymity.
“We have received go ahead from the market regulator to issue IPO,” said a company official. Industry experts feel that the price band may be set at Rs.1,400-Rs.1,500 a share, giving HDFC AMC a valuation of Rs.30,000 crore.
Earlier in May, SEBI had put on hold the IPO of HDFC AMC citing examination of past violation.
In another development, the fund house has allotted shares of Rs.150 crore to 140 distributors through private placement, said the official quoted above. HDFC AMC had reserved up to 7.2 lakh shares for its empanelled distributors.
“As of December 31, 2017, approximately 68.2% of our total AUM was because of third party distribution channels, such as IFAs, national distributors and banks. As these distribution channels become increasingly important in our industry, any failure to secure new distribution relationships or maintain our existing relationships, our competitiveness may be adversely affected. As many of our distribution relationships are non-exclusive, our distributors may provide similar services to our competitors or prioritize our competitors’ investment product over ours, which could have a material adverse impact on our revenue and results of operations,” the draft offer document stated.
Currently, the fund house has 60,000 empanelled distribution partners across India.
With this, HDFC Mutual Fund will be the third asset management company to be listed. Reliance Nippon Life Asset Management got listed in November 2017 while Shriram AMC, the first listed AMC in India, is no longer listed.
