HDFC AMC shares surge 9% amid block deal
Shares of HDFC Asset Management Company (HDFC AMC) rallied nearly 9% in early trade on Tuesday amid a report that Abrdn Investment Management, formerly Standard Life, plans to sell its stake in the company via a block deal. The United Kingdom-based global investment company is looking to exit HDFC AMC by offloading its entire 2.18 crore shares, or 10.2% stake, in the company today.
The offer price for the deal has been set in the range of ₹1,800 to ₹1,892.45 per share, as per the details shared by the company. This would be at a discount of 0-4.9% against Monday's closing price on the BSE.’
Earlier on May 31 this year, Abrdn sold its entire 1.66% stake in HDFC Life Insurance for ₹2,036.7 crore through a block deal.
As per HDFC AMC’s shareholding pattern available on the BSE, promoter entities own 62.77% stake in the company, followed by retail and others by 12.16%, domestic institutions by 10.34%, foreign institutions by 7.5%, and Mutual Funds by 7.23%.
Reacting to the news, HDFC AMC shares opened 7.6% higher at ₹2,034.95 against the previous closing price of ₹1,891.10 on the BSE. In the early trade so far, the stock jumped as much as 8.9% to ₹2,060, while the market capitalisation rose to ₹43,484 crore. On the volume front, 218 lakh shares changed hands over the counter compared with a two-week average volume of 0.23 lakh stocks.
The largecap mutual fund company touched its 52-week high of ₹2,314 on December 20, 2022, and a 52-week low of ₹1,595.25 on March 20, 2023. At the current price level, the stock trades 11% lower than its 52-week high and 29% higher than its 52-week low.
Meanwhile, HDFC AMC reported 9.6% growth in net profit to ₹376 crore during the quarter ended March (Q4FY23), as against ₹343 crore in the same period last year. Sequentially, the net profit rose about 2% from ₹369.40 in Q3FY23 (October-December).
The mutual fund company’s revenue from operations, climbed 5% to ₹541 crore in Q4FY23, from ₹516 crore in the same quarter of last year. On a quarter-on-quarter basis, revenue dropped over 3% from ₹560 crore.
The operating profit for the quarter stood at ₹394.8 crore as compared to ₹378 crore in the corresponding quarter of the last fiscal.
During the March 2023 quarter, the quarterly average assets under management (QAAUM) was at ₹4,49,800 crore, compared to ₹4,32,100 crore in Q4FY22. It commands over 11% market share in QAAUM of the mutual fund industry.
The board also recommended a dividend of ₹48 per equity share for the fiscal year that ended in March 2023, as compared to ₹42 in the previous fiscal and ₹34 in FY21. It has declared 6 dividends since March 2019. At the current share price, the dividend yield stands at 2.36%, as per trendlyne data.
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