HDFC AMC surges 5% as promoter abrdn plans to exit

Shares of HDFC Asset Management Company (AMC) rallied nearly 5% on the Bombay Stock Exchange (BSE) on Wednesday after its one of the promoters, abrdn Investment Management, plans to sell its entire stake in the company. Formerly known as Standard Life Investments, the investment management firm will sell its entire 10.21% of the paid-up share capital of the company, following which it will cease to be a co-sponsor of HDFC Mutual Fund. At the current market price, the stake sale would fetch around ₹4,700 crore to the U.K.-based firm.

“We would like to inform that the company is in receipt of letter from abrdn Investment Management Limited, one of the promoters holding 10.21% of the paid-up share capital of the company, intimating their intention to sell the entire stake in the company subject to applicable regulatory provisions,” HDFC AMC said in a regulatory filing on Tuesday.

“Consequent to the proposed stake sale, abrdn Investment Management Limited will cease to be a co-sponsor of HDFC Mutual Fund,” it added.

As per the filing, abrdn Investment Management will put on block 2.11 crore shares, or 9.9% stake, with a single buyer. The rest of the shares will be sold separately, subject to feasibility. 

Earlier in August this year, abrdn Investment had sold 5.6% stake in the asset management company for about ₹2,300 crore after the announcement of merger of HDFC with HDFC Bank. The capital market regulator SEBI had also granted its approval for change in control of HDFC AMC along with a change in one of the co-sponsors of HDFC Mutual Fund from HDFC to HDFC Bank, which was part of the merger deal.

In April, HDFC and HDFC Bank board approved a composite scheme for the amalgamation of HDFC Investments and HDFC Holdings into HDFC and later HDFC with and into HDFC Bank.

Currently, HDFC AMC is the investment manager to the schemes of HDFC Mutual Fund, whereas HDFC and abrdn Investment Management are the sponsors of the fund house. Parent HDFC holds 52.59% stake in the company.

On Wednesday, HDFC AMC shares opened a tad lower at ₹2,190.30, against the previous closing price of ₹2,192.35 on the BSE. In the first hour of trade so far, the largecap stock gained as much as 4.6% to ₹2,294.05, while the market capitalisation rose to ₹47,752.5 crore.

HDFC AMC share price currently trades nearly 12% lower than its 52-week high of ₹2,598 touched on December 10, 2021, while it hit a 52-week low of ₹1,690.65 on May 24, 2022. The mutual fund investment company has delivered a negative return of 11% in the past one year, while it gained around 20% in the last six months. The stock has risen 7.5% in a month and 2% in a week.