Information Note

HDFC Asset Management Company Limited

Premia Research Issue Opens: 25-July-2018; Issue Closes: 27-July-2018; Price Band: `1,095-1,100

Issue Details This document summarizes a few key points related to the issue and should not be treated as a comprehensive
summary. Investors are requested to refer the Red Herring Prospectus for further details regarding the issue, the
Face Value: `5 issuer company and the risk factors before taking any investment decision. Please note that investment in
securities is subject to risks including loss of principal amount and past performance is not indicative of future
Public offer ~2.55cr shares
performance. Nothing herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do
Reservation so. This document is not intended to be an advertisement and does not constitute an invitation or form any part
of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this
a) HDFC AMC Emp 3.2lakh shares document nor anything contained herein shall form the basis for any contract or commitment whatsoever.
b) HDFC Emp 5.6lakh shares Company Overview
c) HDFC shareholder 24lakh shares HDFC Asset Management Company Ltd (HDFC AMC) has been the
Net offer ~2.22cr shares most profitable asset management company in India in terms of net
Price Band `1,095-1,100 profit since FY13, according to CRISIL. It operates as a joint venture
Issue Size# `2,800cr between HDFC Ltd. and Standard Life Investments Ltd. As of March
Bid lot 13 equity shares
31, 2018, (a) equity-oriented AUM and non-equity-oriented AUM
100% book
Issue Type
building constituted `1,49,713cr and `1,42,273cr respectively of its total
Post Issue Market Cap#: ` 23,319cr; Note: # - at upper
band
AUM; (b) its market share of total AUM was 13.7% among all asset
% Shareholding Pre IPO Post IPO management companies in India, according to CRISIL.
Promoter 94.95 82.94 Offer Details
Public 5.05 17.06 The offer consists of an Offer for Sale of up to 2.55cr equity shares.
Source: RHP Key Positives
Share Reservation % of Net offer CRISIL’s analysis shows that the industry’s AUM (excluding gold ETF
QIB 50 and FOF) will grow at CAGR of 18.6% from March, 2018 to March,
NII 15 2023. The company, due to its leadership and diversified products
Retail 35 offerings, would benefit from the growth trajectory of industry. As of
Company Management March 31, 2018, company offered 133 schemes that were classified
Milind Barve MD into 27 equity-oriented schemes, 98 debt schemes (including 72 fixed
Piyush Surana CFO maturity plans), three liquid schemes and five other schemes. This
diversified product mix provides it the flexibility to operate
Issue Managers
IIFL Holdings Ltd., Kotak successfully across various market cycles and address market
Mahindra Capital Co. Ltd., Axis fluctuations. Its AUM has grown at CAGR of 25.5% between March
Capital Ltd, DSP Merrill Lynch
31, 2013 and March 31, 2018.
Ltd, Citigroup Global Markets
India Pvt. Ltd., CLSA India Pvt. Financial Summary
BRLMs Ltd, HDFC Bank Ltd, ICICI Consolidated `Cr FY15 FY16 FY17 FY18
Securities Ltd, JM Financial Revenue from operations 1,022 1,443 1,480 1,760
Ltd, J.P. Morgan India Pvt Ltd, Growth (%) yoy 19.1 41.1 2.6 18.9
Morgan Stanley India Co. Pvt.
EBITDA* 591 668 704 966
Ltd, Nomura Financial
Advisory and Sec. (India) Pvt. EBITDA margin (%) 57.8 46.3 47.6 54.9
Registrar Karvy Computershare Pvt. Ltd Reported PAT 416 478 550 722
EPS-Diluted (`) 20.3 23.6 27.1 35.0
Analyst – Tushar Jain
RoNW (%) 41.1 42.1 42.8 40.3
research@iifl.com
Source: RHP, Company, IIFL Research; (EBITDA = Revenue from operations – Employee benefit exps –
Other exps)
July 23, 2018
For additional information and risk factors please refer to the Red Herring Prospectus. Please note that this document is
for information purpose only.
 HDFC Asset Management Company Limited
Premia Research

Key Points
Consistent leadership position in the mutual fund industry
It has been a leader in the Indian mutual fund industry as
demonstrated by its leading position across key industry metrics.
It has consistently been among the top two asset management
companies in India in terms of total average AUM since August,
2008, according to CRISIL. Its proportion of equity-oriented AUM
to total AUM was at 51.3%, which was higher than the industry
average of 43.2%, as of March 31, 2018, according to CRISIL.
Superior and diversified product mix
It offers a wide range of investment schemes across asset
classes catering to various risk return profiles, many of which
have recorded strong and consistent performance compared to
industry benchmarks. Its diversified product mix enables it to
cater specific customer requirements and reduce concentration
risk. As of March 31, 2018, it served customers in over 200 cities
through Pan-India network of 209 branches (and a
representative office in Dubai).
Key Risks
Underperformance of investment products
The performance of its scheme is important to retain existing
customers as well as attract new customers. The performance of
its scheme is dependent on general market conditions and
existing competition in the market. Poor investment
performance, either on an absolute or relative basis, could
impair revenue.
Dependency on promoter’s brand and reputation
Its revenue, results of operation, business and prospects depend
on the strength of the brand and reputation of Promoters, HDFC
Ltd and Standard Life Investments Ltd and their group entities to
a certain extent. Any reputational harm to HDFC or Standard Life
Investments group entities may also negatively affect its brand
and reputation.
 Disclaimer
Premia Research
IIFL Holdings Limited and IIFL Securities Limited (Formerly ‘India Infoline Limited’) (part of the India Infoline Group) are involved in the
initial public offering of HDFC Asset Management Company Ltd, in the capacity of a Book Running Lead Manager and a Syndicate Member
to the Issue. However, IIFL Holdings Limited and India Infoline Limited shall not be in any way responsible for the contents hereof, any
omission therefrom or shall be liable for any loss whatsoever arising from use of this document or otherwise arising in connection
therewith, including with respect to forward looking statements, if any. Neither IIFL Holdings Limited nor India Infoline Limited or any of its
affiliates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special
or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.

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