wo years post raising `2,800 crore through IPO, HDFC Asset Management Company (AMC) garnered subscription upto 83 times in July 2018, marking its journey as a publicly listed company. Being the second largest AMC by size of Asset Under Management (AUM), it is managing `3.57 lakh crore. Principal shareholders include Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited (SLI), who own 52.8 per cent and 26.9 per cent stake respectively.
HDFC AMC provides a large suite of savings and investment products across various asset classes like equity, debt and ETFs among others that provide income and wealth creation opportunities to customers. “Its diversified product mix, which includes 27 equity-oriented schemes, 98 debt schemes (including 72 Fixed Maturity Plans (FMPs)), three liquid schemes, and five other schemes (including exchange-traded and funds of fund schemes), enables it to operate through various market cycles, cater to specific customer requirements and reduce concentration risk,” explains an analyst at HDFC Securities.
The company is India’s largest Actively Managed Equity Fund with Quarterly Average Asset Under Management (QAAUM) in equity-oriented funds worth Rs 1.29 lakh crore with the market share of 14.5 per cent as on June 30, 2020. As per the management, the ratio of equity oriented AUM and non-equity oriented AUM is 39:61 compared to the industry ratio of 38:62. Having said that, the company continues to be a preferred choice of individual investors with 15 per cent share in individual AUM.
Its Profit After Tax (PAT) for the quarter ended June 30, 2020 was
`302.4 crore as compared to `291.7 crore for the quarter ended June 30, 2019 resulting in an increase of 4 per cent. Some establishments including HDFC AMC were exempt from the lockdown and therefore were functional during the pandemic. Further, the corrections in markets from May onward has led to a spike in AUM, which signals good future revenues over the next few months.
As per the Association of Mutual Funds in India (AMFI) the Indian MF industry’s AUM has grown from `6.69 lakh crore as on July 31, 2010 to `27.12 lakh crore as on July 31, 2020 which is more than a four-fold increase in a span of 10 years. This bodes well for the HDFC AMC going forward.
Courtesy its over 65,000 empanelled distribution partners across Independent Financial Advisers (IFAs), national distributors and banks, today HDFC AMC has an established distribution reach through a total of 221 branches of which 145 are in B-30 locations. “We expect the premium valuation of the AMC to continue owing to its higher operational efficiency and industry leading AUM metrics. We continue to apply a P/E of 43x on FY22 estimates (E) earnings per share (EPS),” says an analyst at KR Choksey.