HDFC AMC shares in focus as Abrdn Investment looks to sell entire stake via block deal today

After selling its entire stake in HDFC Life for Rs 2,069 crore last month, the UK-based Abrdn Investment Management (erstwhile Standard Life) may exit HDFC Asset Management Company Ltd (HDFC AMC) by selling its 10.2 per cent stake in the asset management company via a block deal on Tuesday. As per reports, the offer price for the deal will be in the range of Rs 1,800-1,892.45 per share, suggesting an up to 4.9 per cent discount to Monday's closing price of Rs 1,891.10 on BSE. Abrdn Investment Management's 10.2 per cent stake was valued at Rs 4,117.66 crore at Monday's price.

Shares of HDFC AMC have not performed well of late, falling 13.65 per cent year-to-date. This is against a 3.27 per cent rise in the BSE Sensex during the same period.

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In a note on June 15, BOB Capital Markets said HDFC AMC’s MD & CEO Navneet Munot outlined the levers for future growth including launch of new products (including PMS and AIF) to build a holistic platform, as illustrated by the launch of two equity-oriented thematic sectorial funds and one long-duration debt fund. The AMC is looking to expand phygital delivery channels and enhancing the digital experience and maintaining the performance of major equity schemes in the top tier and generating alpha, it said.

BOB Capital Markets said shares of HDFC AMC are trading at 25 times FY25E EPS, a 30 per cent discount to the long-term mean, but it continues to value it at a similar multiple for a target price of Rs 1,946. It maintained a 'Hold' on the stock as it monitors the company’s ability to regain market share, even as it stays positive on on HDFC AMC's brand strength, large AUM base and robust scheme performance.

The stock has an average target price of Rs 1,995, as per Trendlyne, which suggests limited upside ahead.

Abrdn Investment Management had on May 31 sold 3.57 crore shares of HDFC Life at Rs 579.60 apiece. As per media reports, SBI Mutual Fund bought 1.42 crore shares worth Rs 823 crore. Society Generale bought 33 lakh shares worth Rs 193 crore. WF Asian Smaller Companies Fund, Aditya Birla Sun Life MF, Norges Bank, T Rowe Price Asia and ICICI Prudential Mutual Fund also purchased shares worth Rs 100 crore to Rs 150 crore.