Brokerages have recommended subscribing to the 2,800 crore Rupees worth HDFC Mutual Fund IPO. The Initial Public Offering of the HDFC AMC has opened for subscription on July 25, 2018, with a price band of 1,095 Rupees to 1,100 Rupees per share.
HDFC AMC’s IPO kicks off and is expected to attract interest although valuations are at a 20 percent premium compared to that of the only listed competitor Reliance Nippon because of the reasons including strong parentage, high dividend payout ratio, and MF industry’s growth potential, said brokerages, reported The Economic Times.
All brokerages are optimistic on the HDFC AMC’s IPO, saying the fund house’s premium valuations to competitors are justified based on various reasons.
The reasons include HDFC’s brand, strong pedigree, distribution, high dividend payout ratio, higher profit CAGR, long term performance, reasonably stable management profile, wide choices of high-margin equity assets, and high capital return ratios, according to Money Control.
The brokerage houses including Angel Broking, Asit C Mehta Investment Interrmediates, Centrum Wealth Research, GEPL Capital, Motilal Oswal, Prabhudas Lilladher, Emkay, Geojit Research, Centrum Wealth Research, Way2Wealth Brokers, and KR Choksey advise subscribing the HDFC Mutual Fund IPO, according to The Economic Times and Money Control.
Even though brokerages are positive on the HDFC AMC IPO, they also advise investors to be aware of the risks and concerns as well, reported Money Control.
HDFC AMC IPO has opened for subscription from July 25, 2018 and will close by July 27, 2018. HDFC Asset Management Company is the joint venture between HDFC (Housing Development Finance Corporation) and Standard Life Investments. The two shareholders of HDFC ACM will garner about 2,800 crore Rupees via this Initial Public Offering.
Bids for the HDFC Mutual Fund IPO can be made for a minimum 13 equity shares and thereafter in multiples of 13 equity shares, reported Money Control.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]