According media reports, Abrdn Investment Management (Formerly Standard Life Investments Limited), promoter of HDFC AMC, is likely to exit the company through sale of the entire 10.2 per cent stake. With this deal, Abrdn will fully exit the company before the merger of the parent company.
After the stake sale, the share will need to gain around 17 per cent to stand a chance for a re-entry into the MSCI Standard Index, according to Nuvama Alternative & Quantitative Research.
HDFC AMC is the investment manager to HDFC Mutual Fund with a closing asset under management (AUM) of Rs 4.37 trillion and total AUM of Rs 4.36 trillion, as of March 31, 2023. Equity-oriented closing AUM accounted for Rs 2.46 trillion, with non-equity-oriented AUM contributing the rest.
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The company also provides portfolio management and separately managed account services to HNIs, family offices, domestic corporates, trusts, provident funds, and domestic and global institutions. As of March 31, 2023, aggregate assets under these services were at Rs 1,825 crore.
While the assets under management for mutual funds have almost doubled in five years, the industry will experience tailwinds that are expected to propel future growth, said analysts.
The growing financial literacy among Indian investors, coupled with the need for long-term wealth creation, is expected to drive higher participation in mutual funds. As investors move away from traditional investment avenues, mutual funds offer a convenient and professionally managed alternative.
“The growing popularity of SIPs, with large-scale campaigns is improving outreach. India’s burgeoning middle-class segment, characterised by rising disposable incomes and aspirations present a significant growth opportunity. Emergence and growth of fintech platforms will bring in a large pool of new investors,” the management said.
(With inputs from Rex Cano)