HDFC Mutual Fund gets Sebi nod for IPO

New Delhi: HDFC Asset Management Co. Ltd, the country’s largest mutual fund, on Thursday received Securities and Exchange Board of India’s (Sebi) approval to float an initial public offer (IPO).

HDFC Mutual Fund had filed draft papers with Sebi in March and received its “observations” on 22 June, according to the latest update with the markets regulator. Sebi’s observations are necessary for any company to launch public issues like rights issue, initial public offer (IPO) and follow-on public offer (FPO).

HDFC Mutual Fund operates as a joint venture between Housing Development Finance Corp. Ltd (HDFC) and Standard Life Investments. Going by the draft papers, the proposed IPO offers up to 2.54 crore equity shares of the fund house through an offer for sale of 85.92 lakh shares by HDFC and up to 1.68 crore shares by Standard Life.

The HDFC Mutual Fund IPO comprises a net offer to public of up to 2.21 crore equity shares, a reservation of up to 3.20 lakh shares for purchase by eligible employees. Besides, 24 lakh shares have been reserved for eligible HDFC shareholders. Earlier, the regulator had kept HDFC Mutual Fun’s proposed IPO in abeyance “for examination of past violations”.

HDFC Mutual Fund, which has a total asset under management of more than ₹ 3 trillion at the end of March, may become the second asset management company to hit the markets after Reliance Nippon Life AMC. Nomura Financial Advisory and Securities (India), Kotak Mahindra Capital, Axis Capital, BofA Merrill Lynch, Citigroup Global Markets India, CLSA India, HDFC Bank, ICICI Securities, IIFL Holdings, JM Financial, JP Morgan India, Morgan Stanley India are the book running lead managers to the issue.

Apart from HDFC AMC, Sebi has so far this month given clearance to six other companies—Genius Consultants, Varroc Engineering, CreditAccess Grameen, Sandhya Marines, Atria Convergence Technologies and Nekkanti Sea Foods—to launch IPOs. In all, 27 firms have been given the go-ahead for initial share-sale this year. The public issue of Varroc Engineering, which is underway, will close on Thursday.