HDFC Asset Management Company Limited which is tapping the capital market with its offer for sale completed allocation to anchor investors. The company allotted 66,53,265 equity shares to 35 anchor investors comprising of 61 entities at Rs 1,100 which is the top end of the band. The companies offer for sale consists of 2,54,57,555 equity shares in a price band of Rs 1095-1100.

There is a very active grey market on for the shares of HDFC AMC and the premium is a good 40% of the issue price. The same is because the general expectation was that the share price would be in the Rs 1300-1350 range because the preferential offer to distributors was made at Rs 1050. SEBI struck down the preferential offer made on 30th April of 14,33,600 shares at Rs 1050 and asked the company to cancel the same and pay 12% interest on the intervening period.

The impasse was resolved with HDFC selling these preferential shares at Rs 1075 which included the issue price of Rs 1050 and interest of Rs 25. This became a price discovery with KKR picking up 12.61 lac shares.

This lower price than anticipated has caused the hype in the market. NBFC’s have also jumped into the fray and hiked up interest rates from the 5-5.5% to 9-9.5%. Watch this space for the next three days for further updates.

The full list of anchor allotment with shares is given below: –

A volatile week coupled with political drama was the highlight of trading in the week gone by. The markets were virtually flat with the BSESENSEX losing a mere 45.26 points or 0.12% to close at 36,496.37 points. NIFTY lost 8.70 points or 0.08% to close at 11,010.20 points. The broader markets saw the BSE100, BSE200 and BSE500 lose 0.30%, 0.36% and 0.62% respectively. BSEMIDCAP lost 1.55% and BSESMALLCAP lost 3.02%.

Friday saw the TDP sponsored and supported by opposition parties, debated and voted upon. It provided nation wide drama and an opportunity to electronic and digital media to have large number of eyeballs. The outcome was on expected lines with the motion being defeated. It did however throw up new combinations and permutations which could play out in the general elections next year.

The offer for sale from TCNS Clothing Co. Limited was subscribed 5.27 times with the QIB portion subscribed 13.47 times, HNI portion subscribed 5.08 times and Retail portion undersubscribed 0.67 times. The company is into the retailing of women’s apparel under its three brands, W, Aurelia and Wishful.

There is another IPO this week from HDFC which is offering for sale 2.54 cr shares in its asset management company, HDFC Asset Management Company Limited. The price band is Rs 1095-1100. The issue opens on Wednesday the 25th of July and closes on Friday the 27th of July. The company has an AUM (assets under management) of Rs 2.92 lakh crs of which 51% is equity and 49% is non-equity. The company had a net profit of Rs 721.62 crs and therefore an EPS of Rs 34.96. The offer for sale at the top end of the band is at 31.46 times, its EPS, which is significantly higher than that of Reliance Nippon Life Asset Management, which is the only other listed player in the space. The brand HDFC has a better acceptance and that could probably explain the rationale for the higher pricing.

Investors in the issue are probably lucky that the pricing has been kept at these multiples, as the market expectation was for even higher valuations. The company had allotted shares at Rs 1050 to its distributors, which was struck down by SEBI. The company was then asked to buyback these shares and pay interest to the applicants. The company chose instead to buy back the shares through KKR at the issue price of Rs 1050 along with an interest component of 12% per annum which amounted to Rs 25 per share. As these shares would be under lock-in, this effectively became a price discovery and hence the extremely narrow price band.

The week ahead sees July futures expire on Thursday the 26th of July. The current value of NIFTY at 11,010.20 is higher by 421.10 points or 3.82%. With four trading sessions to go for expiry, bulls have the upper hand and they are likely to take the series as well. Post expiry, there would be another three days of trading in July to ensure the 11-year track record of markets rising in July to hold good.

Markets would be choppy and there would not be smooth sailing for either bulls or bears. On a year to date basis the BSESENSEX is up 6.68%, while NIFTY is up 4.36%. BSEMIDCAP is down 17.28% and BSESMALLCAP 22.32%. The markets seem to be on track for allowing history to repeat itself as far as the July phenomena is concerned. It also appears that the mid and small cap segments are at around their lows and should move up. The only question is how quickly? Any sharp movement is not good, and it should be a slow and measured up move as the pain on the downside has been tremendous.

TCNS Clothing Company Limited which had tapped the capital markets with its offer for sale of 1,57,14,038 shares was subscribed. The price band of the issue was Rs 714-716.The issue was subscribed 5.27 times with the QIB portion subscribed 13.47 times, HNI portion subscribed 5.08 times and Retail remained undersubscribed 0.67 times. There were roughly 87,000 applications which means in terms of number of lots the issue was subscribed 0.32 times. This effectively means that the people who have applied for retail have applied for more than one lot.

Earlier the company had allotted 47,14,210 equity shares to 22 anchor investors comprising of 33 entities. The highest allocation has been made to Fidelity as a group who have been allotted 8,17,020 equity shares or 17.3% of the total anchor allotment. These shares have been given to three entities. GMO and Goldman Sachs have been allotted an identical 4,74,860 equity shares or 10.1% of the anchor allocation.

The company is into women’s fashion and retails under three brands. The brands are W, Aurelia and Wishful.

The full details of subscription within each category are given below: –