Business

Striking Gains For HDFC AMC IPO Investors As It Makes A Strong Debut On BSE, NSE

JAVED SAIFI | 0
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| August 6 , 2018 , 11:21 IST

HDFC AMC IPO investors recorded a huge gain on Monday as the shares of the company made a strong debut on BSE and NSE with around 65 percent surge from the issue price.

The shares of the Asset management company rose to Rs 1832 as compared to the issue price of Rs 1100.

HDFC AMC had offered Rs 2800 crore IPO during July 25-27 and the price band was fixed at Rs 1095-1100 per share.

HDFC had issued 25.46 million shares and the issue had generated huge interest among investors to subscribe for shares. The shares were subscribed 83 times.

Also Read: HDFC Bank Removes Iron Spikes Installed Outside Mumbai Branch After Massive Criticism

Now the question is what investors should do on the listing day gains?

Astha Jain, Senior Research Analyst at HEM Securities told FE, “We would like to advise to hold on listing day as the company being consistent and strong financial performer is expected to gain with wider penetration of mutual fund industry in Indian Savings area going forward. However, If the stock is available during intraday volatility somewhere below Rs 1500 on a listing day then we advise to buy. In the long run, we expect 70-80 percent above issue price return on the stock for a time period of a year or more."

On the other hand, an independent investment advisor Sharmila Joshi told the Live Mint, “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.”

HDFC AMC is the second-biggest mutual fund management company with Rs 3.07 trillion worth of assets in the June quarter.

The HDFC AMC has 209 branches across the country and a network of over 65,000 distributors.

The strong returns ratios and higher dividend payout ratio are the key reasons for the company to be among the most profitable asset management company in the country.