Choice Broking has come out with its report on HDFC Asset Management Company. The research firm has recommended to "Subscribe" the IPO in its research report as on July 23, 2018.
Since FY11, HDFCAMC has been the largest asset management company (AMC) in India in terms of equity-oriented AUM. Also it has consistently been among the top two AMCs in India in terms of total average AUM since the month of Aug. 2008. Its AUM has grown at a CAGR of 25.5% between FY13-18. As on 31st Mar. 2018, it had a total AUM of Rs. 2,919.9bn. The company’s market share of total industry AUM was 13.7% and of actively managed equity oriented AUM (which excludes index linked and arbitrage schemes) was 16.8%among all AMCs in India.
• HDFCAMC has been the most profitable AMC in India in terms of net profits since FY13. It had the highest share of net profits and total revenue of 18.8% and 13.5%, respectively, among asset management companies in India in FY17.
• Equity-oriented AUM formed around 51.3% of its total AUM and was
higher than the industry average of 43.2%. Equity-oriented schemes
generally have a higher fee structure with around 2x margin
compared to non-equity-oriented schemes, which helps HDFCAMC to
achieve higher profitsValuation and Outlook
At the higher price band of Rs. 1,100 per share, HDFCAMC’s share is valued at a P/E multiple of 32.3x (to its restated FY18 EPS of Rs. 34) as compared to only listed peer P/E of 26.1x
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