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Price range set for smaller Rs28bn HDFC AMC IPO

Reuters - UK Focus

By S Anuradha

SINGAPORE, July 17 (IFR) - The price range for HDFC Asset Management’s up to Rs28bn (US$409m) IPO has been set at Rs1,095–Rs1,100 per share, according to a term sheet.

The IPO is smaller than the previously expected up to Rs35bn float as recent market volatility has prompted the vendors to leave more on the table for investors.

A total of 25.5m shares, or 12% stake, will be sold by the asset manager’s two biggest shareholders - mortgage lender Housing Development Finance Corp and Standard Life Aberdeen. HDFC is selling 4% stake and Standard Life (LSE: SL.L - news) 8%.

The IPO will be open for subscription on July 25-27.

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The IPO was pushed back from July 11 after the market regulator asked HDFC AMC to scrap a pre-IPO share placement to financial advisers. HDFC AMC issued 1.44m shares in April at Rs1,050 each totalling Rs1.5bn to 140 distributors. This prompted other AMCs to complain to the Securities and Exchange Board of India that such an issue would affect the ability of the financial advisers to give neutral advice to their clients.

Sebi asked HDFC AMC to cancel the placement and refund the money to the financial advisers with 12% interest.

Investment firm KKR has now bought the 1.44m shares at the same price with 12% interest.

HDFC AMC had assets of Rs2.93trn as of December 31 2017.

Axis (LSE: 0GWC.L - news) , Bank of America Merrill Lynch, Citigroup (NYSE: C - news) , CLSA, HDFC Bank, ICICI Securities, IIFL Holdings (BSE: IIFL4.BO - news) , JM Financial (BSE: JMFINANCIL.BO - news) , JP Morgan, Kotak, Morgan Stanley (Xetra: 885836 - news) and Nomura are the bookrunners.

HDFC AMC will be the second Indian AMC to list after Reliance Nippon Life Asset Management. (Reporting by Anuradha Subramanyan)