The Securities and Exchange Board of India (Sebi) has approved HDFC Asset Management Companys much-awaited initial public offering (IPO) after the regulators conditions were complied with.The capital markets regulators nod came after distributors and financial advisers, which had received shares of the countrys second-largest mutual fund in an exclusive share sale before the IPO, sold them to private equity firm KKR.Earlier this month, Sebi had directed HDFC AMC to scrap the share placement to the financial advisers and distributors to rule out any conflict of interest.
This was understood to be Sebis condition for approving the share sale.
The IPO is likely to hit the market in the last week of July after completion of other regulatory formalities, said a person aware of the matter.
Phone calls to a spokesperson of HDFC AMC went unanswered.KKR Bought 1.44 million SharesShares worth about Rs 150 crore had been sold to 140 distributors and financial advisers at Rs 1,050 apiece in April.
After Sebis directive, KKR acquired the 1.44 million shares of the asset management company at the same price and 12% interest.The issue will be the second by an Indian mutual fund after Reliance Nippon Asset Management raised Rs 1,540 crore in November.
That issue was subscribed 81 times.
The size of the upcoming IPO by HDFC AMC is likely to be Rs 3,000-3,500 crore.
About 25.4 million equity shares will be on offer, of which 320,000 will be reserved for employees and 2.4 million for HDFC shareholders.HDFC AMC is 60% owned by HDFC while Standard Life Investments holds the rest.
Both will sell about 5% stake each in the IPO.HDFC AMC is the most profitable domestic asset management company.
Its net profit for the year ended March was Rs 722.61crore, an increase of 31% from Rs 550.24 crore a year ago.