HDFC to sell over 4% stake in asset management subsidiary through IPO

Private equity, venture capital investments, Private Equity Advisory, HDFC Ltd, financial services, private equity monthly deal tracker IPO of HDFC Asset Management Company Ltd. was approved by the Housing Development Finance Corporation in November last year. (PTI)

HDFC Ltd will sell over 4 percent stake in its asset management subsidary through an initial public offering (IPO). The company informed through an exchange filing that HDFC board has given approval to the sale of as much as 85.9 lakh shares of Rs 5 each of HDFC Asset Management Company Ltd. that represents 4.08 percent of the paid-up share capital. The IPO of HDFC Asset Management Company Ltd. was approved by the Housing Development Finance Corporation in November last year.

In order to keep it holdings at least 50.1 percent in the asset management company, the HDFC board had approved to offer part of its shares held in the HDFC AMC to the public in one or more than one tranches. In the fiscal ended March 2017, HDFC AMC clocked a total revenue of Rs 1,588 crore. The net profit of the AMC was registered at Rs 550 crore. By March end last year, HDFC accounted for 59.99 percent shares in the AMC. The stake of HDFC in the AMC was recorded at 57.36 percent at the end of July-September quarter of FY17-18. HDFC AMC will continue to be its arm after launch of IPO as well said HDFC. The HDFC shares trading at Rs 1,863.25 up 0.45 percent on BSE at the time of reporting.

Meanwhile, HDFC Bank is said to have picked arrangers for $2.4 billion share sale, Bloomberg reported. The names of a few of the arrangers include Bank of America Corp, Morgan Stanley and Credit Suisse Group AG, the report said. As soon as the company gets needed regulatory approvals, the sale process will start. The bank has plans to raise most of the funds from global investors via sale of American depository receipts. It will sell stocks in India to raise the remaining amount. The raised capital will be used to support growth plans of the most expensive lender in the world and boost its capital buffers, Paresh Sukthankar, deputy managing director of HDFC Bank had said in January.

Source: Financial Express