HDFC AMC to obtain a valuation of nearly 8% of its assets under management

More than two decades of the mutual fund industry is suddenly entering the IPO market. There is no urgency because the business model does not require capital injection, but the dilution of the shares would certainly unlock the value of the sponsors. CMAs per se do not get higher ratings like life insurance companies, banks or the general insurance industry. AMCs are often valued as a percentage of their badets under management. Reliance Nippon AMC was recently listed, while HDFC AMC would enter the market next week. Let's look at how the HDFC AMC will be evaluated in the market

• The HDFC AMC IPO, which is expected to reach a valuation of Rs 23,161 crore, obtains a valuation of nearly 8% of its badets under management. of Rs 3,00,548 crore. This is on the rise because AMC often gets a 5-6% valuation of badets under management
• The AMC IDFC, which is on sale, is trading a valuation of about 5% of its badets under management. . According to Mr. Expert, the sale of the operation, market leadership, performance and brand also count in the determination of a benchmark for a CMA. "You can not rank all AMCs in a 5-6 percent bracket," experts say.
• The very first IPO of the mutual fund industry actually comes from Reliance Nippon Life AMC, which today has a value of Rs 13,601 crore, which is 5.55 percent of its AUM Rs 2.44,903 crore. There are also market conditions that affect the valuations. The industry is new to the secondary market and investors have expectations. Recently, there has been a series of IPOs from the insurance and general insurance industry, who have offered new investment options in search of money. an exhibition in the financial services sector.
• The largest mutual fund in terms of badets under management is ICICI AMC with an AUM of Rs 3,05,739 crore. If ICICI AMC decides to opt for an IPO, it will get a valuation close to HDFC AMC. Currently, the two insurance branches of ICICI Group have been listed on the stock exchanges. According to some indications, the group would unlock the value of the AMC activity.
• The oldest brand, UTI AMC if it goes for an IPO, the valuation would be around Rs 10,000 crore. UTI AMC has been in the news for planning an IPO because the foreign investor T Rowe Price has pleaded for an IPO in the CMA. There are indications that UTI AMC will be next after HDFC AMC to tap the market.
• Experts say that the entire CMA industry is not much appreciated. If we take as a benchmark a valuation of 5 to 6% of badets under management, any industry, if listed, would get a stock market valuation in the order of Rs 1,50,000 crore, either the stock market valuation of Bajaj Finance or ICICI Bank.