HDFC Mutual Fund has fixed the priced band for its initial public offering at ₹1,095-1,100 an equity share with a minimum bid lot size of 13 equity shares and in multiples of 13 equity shares thereafter.
The issue will open for public investment between July 25 and 27. Subscription by anchor investors will start on July 24. Though the fund house will raise about ₹2,800 crore through the IPO, the entire money will go to the promoters as they are offloading their shares.
The board of directors of HDFC had approved offering up to 85,92,970 equity shares of ₹5 each of HDFC AMC representing 4.08 per cent of its then existing issued and paid-up equity share capital, by way of an offer-for-sale in the proposed IPO of HDFC AMC.
According to the draft red herring prospectus filed with capital market regulator SEBI on March 14, the 2.54-crore equity share issue consists of an offer-for-sale of up to 85.93 lakh shares by HDFC and up to 1.69 crore shares by Standard Life Investments. Both promoters currently hold 57 per cent and 38 per cent stake, respectively.
Delay in clearance
The equity shares are proposed to be listed on the BSE and the NSE.
Earlier, the capital market regulator had delayed clearance of the IPO as the fund house, in April, sold 14.4 lakh shares to a group of distributors and financial advisers for ₹150 crore as part of pre-IPO placement. Close to 200 distributors and advisers had applied for the shares but the allotment was made only to 140 distributors. Soon after the allotment, certain industry players had complained to SEBI on ‘conflict of interest’ as the asset management industry generates bulk of its business through distributors.
HDFC AMC was directed by SEBI to cancel the allotment it made to distributors and return the money along with interest of 12 per cent a year. However, global private equity major KKR came in as a saviour and picked up the stake from 140 distributors and paid 12 per cent interest.