The subscription for non-retail investors closed on June 17
The reserved retail portion of offer for sale issue of HDFC Asset Management Company closed for subscription on June 18, the last day of bidding.
On day 2 of the offer, retail category saw bids for 9,87,191 equity shares against their reserved portion of 12 lakh shares which means the portion subscribed 82.27 percent, while the non-retail portion, who selected 'carry forward' option, has received bids for 3,89,561 equity shares.
Actually the reserved non-retail portion of 54 lakh shares, which was opened for subscription on June 17, was oversubscribed nearly 2.7 times as it received bids for 1,45,63,767 equity shares against issue size of 54 lakh shares for non-retail investors, the exchanges data showed on Wednesday.
Also there was an additional 54 lakh shares put it on sale in case of oversubscription in the non-retail segment. As the issue was already oversubscribed, company exercised oversubscription option yesterday and fixed clearing price of Rs 2,386.10 per share for retail and non retail bids of HDFC Asset Management.
"Total shares (base size + green shoe) 1,20,00,000 put it on the block for sale. The seller shall intimate the stock exchanges of its intention to exercise the oversubscription after trading hours (i.e. on or before 5 pm) on June 17, 2020. The seller has intimated the stock exchanges of its intention to exercise the oversubscription," the BSE said.
Chhitij Jain, Head of Derivatives at Rudra Shares and Stock Brokers said as the company exercised the oversubscription option, it already alloted shares to non-retail investors on June 17 itself, which can be ready for sell again on June 18.
In case of retail investors, the issue size is 6,00,000 equity shares and additional (greenshoe) option to sell another 6,00,000 equity shares in case of oversubscription. Hence, the total shares (base size + green shoe) for retail investors are 12 lakh.
"The cut off price for retail investors category bids has been fixed at Rs 2,386.10 based on the clearing price of non retail bids in HDFC Asset Management Company. As per SEBI OFS guidelines, retail bids below the cut-off price shall not be eligible for allocation," the exchange said.
The floor price for the offer was fixed at Rs 2,362 per equity share, while the HDFC AMC stock price closed at Rs 2,414.50 on the BSE June 17.
"At the cut off rate of OFS, it is offered at 40x FY2020 EPS, demanding a market cap of Rs 50,735 crore, which is 13.7 percent of the MF AUM (Rs 3,70,113 crore for the month of March 2020). Considering that HDFC AMC is the second largest AMC coupled with huge potential of MF industry growth, strong return ratios, asset light business, higher dividend payout ratio and track record of investment performance, we are positive on this OFS and rate it as subscribe," Jaikishan Parmar, Senior Equity Research Analyst at Angel Broking told Moneycontrol.
Standard Life Investments, the second promoter of HDFC AMC after HDFC, decided to sell up to 60 lakh shares (representing 2.82 percent of total paid up equity capital of HDFC AMC) via two-day offer for sale issue on June 17-18.
It also put out additional 60 lakh shares on the block in case of oversubscription of issue, which in total it intends to sell up to 1.2 crore equity shares or 5.64 percent of total paid up equity capital of HDFC AMC.Out of total issue size, 12 lakh shares are reserved for retail investors and the balanced 1.08 crore shares are for non-retail investors.