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Mumbai: HDFC Asset Management Co. Ltd, the mutual fund joint venture of mortgage lender Housing Development Finance Corp. Ltd (HDFC) and Standard Life Investments Ltd, will launch its 3,000 crore IPO in the second week of July, said three people aware of the development.

HDFC Mutual Fund had filed its so-called draft red herring prospectus with Securities and Exchange Board of India (Sebi) on 14 March. Sebi approved it on 28 June.

“They will launch the IPO on 11 July and the offer will close on 13 July. The anchor allocations will be done on 10 July. They had been waiting for the approval from Sebi, which was held up for a while. The demand was always there for the issuance given that it comes from the HDFC brand and the fact that HDFC companies have delivered strong returns to investors, including the last IPO of HDFC Standard Life Insurance Co. Ltd," said one of the people cited above, requesting anonymity as he is not authorized to speak to the media.

HDFC Mutual Fund’s IPO size is expected to be around 3,000 crore, he said.

However, a spokesperson for HDFC AMC said: “The Company would like to clarify that this indicated schedule for the Offer is incorrect and has not been approved by the Company. Further, please note that the terms of the Offer, including the Offer opening and closing dates, shall be determined and disclosed in the red herring prospectus of the Company, upon its registration with the Registrar of Companies, Maharashtra at Mumbai, and in the statutory advertisements issued by the Company, post registration of the red herring prospectus."

In a notification issued in May, Sebi had kept the proposed initial share sale of HDFC Mutual Fund in abeyance “for examination of past violations." The Sebi notification did not disclose the reasons for the same.

The HDFC Mutual Fund IPO is a pure offer for sale, which will see the two shareholders sell a total of 25.457 million shares of the company. HDFC is selling 8.59 million shares, while Standard Life is selling 16.86 million shares, according to the draft prospectus. The share sale will see a dilution of 12% stake in the company, with HDFC diluting 4% and Standard Life diluting 8%.

According to the company’s draft prospectus, its assets under management (AUM) stood at 2.93 trillion as of 31 December.

HDFC Mutual Fund offered 127 schemes that were classified into 28 equity-oriented schemes, 91 debt schemes, three liquid schemes, and five other schemes (including exchange-traded schemes and funds of fund schemes), as of 31 December. HDFC Mutual Fund serves customers in over 200 cities through a network of 183 branches (and a representative office in Dubai).

The mutual fund company’s revenues have grown at a compounded annual rate of 19.3% between fiscal 2013 and fiscal 2017, to reach 1,587.9 crore. Its profit grew at a rate of 14.6% over the same period to reach 550.2 crore in fiscal 2017.

HDFC Mutual Fund will be the second major asset management company to list on the Indian stock exchanges.

In October, the 1,542 crore initial public offering of Reliance Nippon Life Asset Management Ltd, India’s third largest mutual fund manager, was subscribed 81.45 times.

A total of 12 investment banks are managing the HDFC Mutual Fund IPO, including Kotak Mahindra Capital Co. Ltd, Axis Capital Ltd and DSP Merrill Lynch Ltd.

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