HDFC AMC share price continued to soar after a blockbuster listing this morning. At NSE, HDFC AMC shares hit an intraday high of Rs 1,835 in the morning trade implying a premium of more than 65% as compared to the IPO price of Rs 1,100. Market experts are of the view that the gains may moderate going forward, given such a stellar listing. So what should investors do now? “HDFC AMC shares had a great listing on the exchanges. Those who have bought the shares only for listing gains may book profits and exit the stock. However, there are many long-term investors who wish to hold on to the shares. We had a subscribe on the stock,” Siddharth Sedani Vice President- Equity Advisory, Anand Rathi Shares and Stock Brokers told FE Online. What about the investors who missed the issue? “Retail investors are advised to wait for price to come down from this high level. The 60%+ increase in the price has made the stock fully priced leaving no scope for earning returns,” Dara Kalyaniwala Vice President, Investment Banking PL Capital Markets told FE Online. According to Siddharth Sedani of Anand Rathi, once the over-exuberance moderates, and the dust settles in the next few days, investors may look for fresh buying opportunities. “After such a robust listing, it is advised not to do any fresh buying. However, investors who have got the allotment can continue to hold the shares,” he said, adding that the house doesn’t have any further update on the stock. Also read: Share Market Live: Sensex hovers around 37,800, Nifty trades above 11,400; ICICI, Axis Bank, RIL lead According to the expert, investors realise that the other two stocks (HDFC Bank and HDFC) are also long term wealth creators. “We have had stellar listings in the past including Infosys, and D-Mart (Avenue Supermarts) more recently. So, investors can hold the shares for the long -term,” Sedani observed. Earlier, Astha Jain, Senior Research Analyst, Hem Securities had anticipated strong listing gains of 35-40%. Jain said that investors can look to book profits for half of the shares they own. “Book profit in minimum one fourth or maximum half of shares and keep remaining half in portfolio for long term. We are expecting gain of 100 % above issue price in 1 year horizon,” Astha Jain told FE Online in a note. “Returns are a function of what value you give to a company when you buy it. I think the investors should be more measured in what value they give to a company when they acquire it. Being generous at the time of acquisition implies that you should moderate your return expectations over time, and not expect others to be as generous as you are for extended periods of time. This is the simple rule of IPO investing. When the party is on, I would just like to sound a word of caution and not spoil the party,” Shyam Sekhar of i Thought told ET Now.<doc-sep>Maybe, one should stop talking about peer comparisons on valuations for HDFC Group entities. The group has re-defined the word “valuation” with each and every group company that they have listed, i.e., HDFC Bank, HDFC Ltd, GRUH Finance, HDFC Standard Life and now HDFC Asset Management Company (HDFC AMC). The HDFC AMC stock witnessed second-highest listing gains in 2018, especially at a time when non-banking financial institutions (NBFI) are seeing a big correction in their valuations. The subscription to the IPO was an overwhelming 83x with both institutional and high net worth investors subscription amounting to more than 190x. The HDFC AMC IPO is getting a valuation of close to 7.6 percent of its AUM of Rs 3,00,548 crore for Q1FY19. The scrip listed at 11.9 percent of AUM, while it hit a high of 12.6 percent of AUM. On the National Stock Exchange (NSE), HDFC AMC has opened at Rs 1,726, up 57 percent against its issue price. SWOT analysis of HDFC AMC Strengths - Market leader in balanced fund category with 35 percent market share. Weakness - Core earnings lower due to high share of treasury investment as % of networth. Opportunities - Mutual funds have been increasing their penetration. Threats<doc-sep>live bse live nse live Volume Todays L/H More × Share price of HDFC Asset Management Company, the country's second-largest mutual fund house, started off trade on a stellar note on Monday. The stock listed at Rs 1,738 on the NSE, registering a healthy gain of 58 percent over issue price of Rs 1,100 per share on the NSE. It crossed Rs 1,800 levels on the exchange and hit a day's high of Rs 1,825. At 10:04 hours IST, it was trading higher by 65.55 percent or Rs 721 at Rs 1,821. On the BSE, the stock was trading at Rs 1,807, up by 64.27 percent or Rs 705 after hitting day's high of Rs 1,832. This is the fourth company from the HDFC Group listed on bourses after HDFC, HDFC Bank and HDFC Standard Life. As history suggests, HDFC's has created enormous wealth for shareholders and has been a defensive play in the market. The group is backed by big foreign and Indian institutional investors and mutual fund houses owing to its strong corporate governance and earnings performance. That is why all HDFC Group companies trade at premium valuations and so is the case with HDFC AMC. The joint venture fund house raised Rs 2,800.33 crore through public issue and issued 2,54,57,555 equity shares at Rs 1,100 per share. Housing Development Finance Corporation and Standard Life Investments lower their shareholding via this IPO. The public issue was subscribed 83.06 times with overwhelming response from institutional investors during July 25-27.<doc-sep>New Delhi: Shares of HDFC AMC are set to list on Monday, with experts anticipating strong gains on debut. There was strong demand for the HDFC AMC IPO, which was subscribed 83 times. Reports say grey market operators expect shares of HDFC MF to list with gains of around 40%. HDFC AMC has fixed the issue price of IPO at ₹ 1,100 . The IPO was open between 25 July and 27 July and HDFC AMC had offered 25.46 million shares in a price band of ₹ 1,095-1,110 apiece. Analysts remain positive on the stock but caution on valuation. Sanjiv Bhasin, EVP-Markets & Corp Affairs at IIFL, says that going by the huge demand the HDFC AMC IPO attracted, the stock is likely to get a good pop on listing. Both the insurance and mutual fund industries are sunshine sectors and will attract a lot of inflows in the future, he says. But he has a word of caution for those who missed out on the subscription. “The stock is not cheap and besides that, the current market valuation is also very high," he says, adding that investors should look at the stock from a long-term view. Going by the grey market premium, HDFC AMC shares are expected to see a strong listing, says Sharmila Joshi, an independent investment advisor. Though shares of HDFC AMC have good long-term potential, “I don’t want to be part of the first-day frenzy and buy the share at a fancy price. Instead, I would be looking at shares of HDFC, which will offer me exposure to diverse businesses, such as banking, insurance, asset management and mortgage financing." Last year, HDFC AMC’s rival Reliance Nippon Life Asset Management Ltd raised ₹ 1,542 crore in an IPO. Gaurang Shah, head investment strategist at Geojit Financial Services, says that the asset management sector has a lot of growth potential. New investors can look at buying the stock from a long-term perspective, he added. HDFC AMC is a joint venture between mortgage lender Housing Development Finance Corporation (HDFC) and Standard Life Investments. HDFC AMC is the second biggest fund house in the country. T.S. Harihar, founder and chief executive officer at HRBV Client Solutions, says HDFC AMC has a strong equity franchise but the stock is already fully valued. “And on top of listing gains, as expected, the margin of safety will be very less. This could cap the short-term upside," he said. “At the valuation of valuation of ₹ 30,000 crore the IPO values the AMC at twice the valuation of the Reliance AMC. It values the HDFC AMC at 7-8% of the AUM which is the normal valuation that an AUM gets. Upsides may be limited," Harihar said. Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.<doc-sep>
4. HDFC Asset Management Company (AMC) | Return: 42.41% | Issue size: Rs 2800 crore | Listing date: August 6, 2018 | Subscription ratio: 83.06 | HDFC AMC operates as a joint venture between Housing Development Finance Corporation (HDFC) and Standard Life Investments. live bse live nse live Volume Todays L/H More × With a listing gain of about 58 percent on the NSE on Monday, HDFC Asset Management Company had a stellar debut on the bourses. The HDFC AMC stock listed at Rs 1,738 on the NSE, up 58 percent as compared to the issue price of Rs 1,100 per share. It crossed Rs 1,800 levels on the exchange in intraday trade. The stock witnessed the second highest listing gains in 2018 and 6th highest since 2011, data showed. HDFC AMC public issue was subscribed 83.06 times receiving bids for 156.19 crore equity shares against IPO size of 1.88 crore shares (excluding anchor portion). This is the second asset management company to hit the market after Reliance Nippon Life AMC, which had raised Rs 1,542 crore last year. When compared to HDFC AMC, Reliance AMC was listed at 16.7 percent premium on November 6. The stock had opened at Rs 294 on the BSE as against its issue price of Rs 252. Experts said HDFC AMC's premium valuations to peers are justified on account of higher profit CAGR, strong pedigree, HDFC's brand, distribution, long-term performance, relatively stable management profile, high dividend payout and high capital return ratios. HDFC AMC shares closed at Rs 1,815.15, up 65.01 percent, while Reliance AMC stock had 12.7 percent at Rs 284. That is why all HDFC Group companies trade at premium valuations and so is the case with HDFC AMC. While the average assets under management of second largest fund house HDFC AMC stood at Rs 306,841 crore, that of fourth largest fund house, Reliance AMC was Rs 240,445 crore. Valuations With HDFC AMC listing with significant gains over issue price, Reliance AMC's valuation discount to HDFC AMC has widened to more than 50 percent. At the day's closing prices, HDFC AMC's market cap to AUM was at 12.7 percent while for Reliance Nippon AMC it was 6.5 percent. HDFC commanded a premium valuation for its brand and superior return ratio with return on equity (RoE) at 40 percent. Siddharth Khemka, Head- Retail research, Motilal Oswal Securities advises investors’ to hold the stock post listing as well. “HDFC AMC being a market leader in the Indian Mutual fund industry is expected to be one of the best beneficiaries of the increasing financialisation of household savings in India,” he added. Brokerage Nomura India last week initiated a bullish view on India’s asset management companies (AMCs), given the strong growth opportunity and improving operational metrics, which it believes are more structural and less cyclical. "We expect a 20 percent CAGR in AUMs over FY18-25 with improving equity mix, as the sector is one of the key beneficiaries of the rising financial savings mix while penetration levels are still extremely low. In our view, operating leverage and improving equity and improving equity mix should take care of yield pressures, while strong AUM growth should support profitability improvement," it said.