Housing Development Finance Corporation, a mortgage lending firm, has decided to offload a little over 4 per cent of its holding in its subsidiary HDFC Asset Management Company through an initial public offering.

HDFC currently holds 57.5 per cent in HDFC AMC, while Standard Life Investments has 38.2 per cent stake. HDFC AMC owns HDFC Mutual Fund.

The committee of directors set up by the HDFC board has approved offering over 85.92 lakh equity shares of HDFC AMC at ₹5 each, representing 4.08 per cent of the paid-up share capital, for sale in the IPO, said HDFC in a statement on Tuesday.

The price of each share and the amount to be raised will be determined through the book-building process.

HDFC had approved the IPO of HDFC AMC and offer-part of its shares to the public in one or more tranches so that its holding remains at least 50.01 per cent in the AMC arm.

₹2.89-lakh crore AUM

Last November 2017, the board of HDFC AMC approved initiating the process for an IPO. HDFC AMC had earned total revenues of ₹1,588 crore last fiscal, and posted a net profit of ₹550 crore.

As of December quarter, the average assets under management was at ₹2.89 lakh crore and the average equity assets as a proportion of total MF assets was 47 per cent in December. The assets under management of the mutual fund industry was robust at ₹22.42 lakh crore.

As of December-end, HDFC MF managed 57 schemes, comprising debt, equity, gold, exchange-traded funds and fund of funds schemes.

Last October, the first IPO of the MF industry was made by Reliance Nippon Life AMC and it received tremendous response with the issue getting subscribed 81 times. It received subscription for ₹1.03 lakh crore against the offer to raise ₹1,542 crore. It received bids for 349.09 crore shares against the total issue size of 4.28 crore shares (excluding anchor portion).

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