HDFC AMC traded at an overwhelming ₹1700.05 on BSE Sensex at 9:20am today. Investors gained ₹ 600.05 more on each share allotted. A 54.55% more on the offer price of the IPO.
It closed at rs 1815.15 at BSE, an increase of 65.01% on the issue price. Highest trading was at rs 1842.95.
HDFC AMC raised ₹2800.33 cr for 2,54,57,555 equity shares through IPO. The final offer price was ₹1,100 per share. HDFC AMC IPO saw an overwhelming response on the last day with high demands from qualified institutional investors and noninstitutional investors. Retail investors subscribed at double the rate on the last day.
HDFC AMC opened with positive returns at the stock exchange today. The fact that it is backed by Foreign and Indian Institutional Investors, derive strong earnings. The wealth accumulated over the years in the form of profitable CAGR (Compound Annual Growth Rate- a scale to measure growth over multiple time periods), long term performance and its brand name – HDFC, have attributed to the strong listing today. Between FY14 – FY18 net profits grew at a CAGR of 19% to ₹721 cr.
In fact most HDFC group have traded with premium valuation.
Trading on stock exchanges
Financial experts suggest to hold on to shares until they reach 70-80% on the offer price. This could be anywhere between ₹1,870- ₹1,980. HDFC AMC is the second largest player by AUM growing at a 15-20% per annum. So analysts predict that business performances in the longer run will attract more AUMs (Asset Under Management) which will have a strong impact on growth.
Some experts also suggest that owing to the oversubscription of the IPO and its high listing at stock exchanges, a correction is bound to happen before more growth. So when the prices fall below 30 %, they suggest buying option for investors who are eyeing the secondary market.