HDFC AMC Shares Gain As Abrdn Seeks To Sell Entire Stake
Abrdn will cease being a sponsor of HDFC Mutual Fund, once the transaction goes through.
Shares of HDFC Asset Management Co. gained the most in nearly four months after Abrdn Investment Management Ltd. said it plans to sell its entire stake in the mutual fund house.
In a letter dated Dec. 6, Abrdn said it will place up to 2.11 crore shares, representing 9.9% of the total shareholding of HDFC AMC, with a single buyer at this time and offload the remaining 0.31% stake separately.
Abrdn will cease being a sponsor of HDFC Mutual Fund, once the transaction goes through.
While the transaction may take some time to complete, identifying the buyer may address share supply overhang and aid re-rating, according to Jefferies. It maintained a "buy" rating on HDFC AMC with a target price of Rs 2,450, implying an upside of 12%.
Morgan Stanley said if the stake sale gets regulatory approval, "it could result in a short-term rally in the stock and alleviate the supply risk."
"On a separate note, if Abrdn has already found a single buyer, it likely augurs well in terms of potential demand for quality, high-headline valuation Indian financials with impending supply, such as ICICI Lombard, that have derated over many months," it said.
Shares of the company gained as much as 4.7% to Rs 2,296 apiece by 10 a.m., compared with a flat Nifty 50. The stock also witnessed high trading volume, at 18.7 times the 30-day average for the time of the day.
Of the 21 analysts tracking the company, 13 maintain 'buy', seven suggest 'hold' and one recommends 'sell', according to Bloomberg data. The average of the 12-month consensus price target implies an upside of 1.4%.