Mumbai: Standard Life Investments, one of the promoters of HDFC Asset Management Company is looking to sell up to 60 lakhs shares of the mutual fund constituting 2.82% total equity through offer for sale on June 17 and June 18.
The sale price of the OFS shares has been fixed at Rs 2,362 apiece, a 7% discount to Tuesday’s closing price of Rs 2538, which according to analysts is a bargain buy.
“Despite capital market headwinds, HDFC AMC continues commanding premium valuations due to high return on equity (ROE) and significant dividend payouts” said Vikash Mundhra, analyst, Axis Capital. “Moreover, its low balance sheet risk, no additional capital requirement and no legacy issues will make it a favored play for investors looking for safe and sustainable investment ideas”.
Through the OFS, Standard Life will raise about Rs 1,417 crore. Standard Life has appointed BofA Securities as the broker for the sale. The OFS will open on June 17 for non-retail investors and on June 18 for retail investors. Standard Life has reserved 10% of the OFS shares for retail investors.
The share-sale is being undertaken by the promoter for achieving the minimum public shareholding in the company as prescribed under market regulator Sebi's norm. Currently promoters held 79.61% stake in the company.
HDFC AMC operates as a joint venture between Housing Development Finance Corporation (HDFC) and Standard Life Investments.
As of March 31, 2020, Standard Life held 27% stake in the mutual fund house, while HDFC owned 52.76%
Standard Life Investments sold 47.5 lakh equity shares, representing 2.23% of the total equity share capital of HDFC AMC through offer-for-sale in December last year.
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