HDFC MF IPO gets Sebi nod, to open on July 25

Business Standard - - MARKETS - BS RE­PORTER

HDFC Mu­tual Fund’s ini­tial pub­lic of­fer (IPO) has re­ceived ap­proval from the Se­cu­ri­ties and Ex­change Board of In­dia (Sebi) at a time when mar­ket con­di­tions have turned ro­bust. How­ever, val­u­a­tion of the much-awaited IPO is likely to be lower than the widely ex­pected fig­ure of ~350 bil­lion. Ac­cord­ing to peo­ple in the know, HDFC MF’s IPO would be launched at a val­u­a­tion of any­where be­tween ~270 bil­lion and ~330 bil­lion. Ac­cord­ing to sources, Sebi has is­sued its fi­nal ob­ser­va­tions and Regis­trar of Com­pa­nies (ROC) ap­proval is awaited. This is mostly a pro­ce­dural ex­er­cise. At ~350 bil­lion, HDFC MF would have been valued at 11 per cent of its to­tal as­sets un­der man­age­ment (AUM) as of March 31, and in terms of P/E it would have been around 49x its trail­ing-12 month earn­ings. To be sure, HDFC MF scores bet­ter than Re­liance MF when it comes to cer­tain key op­er­a­tional ra­tios. For in­stance, HDFC MF’s re­turn on eq­uity as of March 31, 2018, stood at 40 per cent while that of Re­liance MF was at 25 per cent. Also, while both th­ese fund houses have a sim­i­lar topline of around ~18 bil­lion, HDFC MF has a higher PAT mar­gin of 39 per cent vs Re­liance MF’s PAT mar­gin of 29 per cent.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.