On the contrary, I think the commission by HDFC AMC is amongst the lowest because of which generally distributors push other AMCs. So this may overall be beneficial.
Above is basis my understanding basis inputs from RMs of a bank. Need to validate further
The redemption tsunami in various categories. Do share your thoughts on the impact of on the earnings
These are all debt funds. Quite expected after the Franklin debt schemes issue. None appear to be equity MF.
Looks like HDFC AMC has come back to no.1 position by AUM. SBI’s month end AUM has come down a little MoM (as per AMFI) and HDFC AMC’s month end AUM has gone up considerably MoM (higher by 30K at the least) as per their statutory disclosures in their own website. Details should be visible in AMFI website in a few days. Liquid fund AUM has gone up well and there is a decent increase in the Equity funds AUM as well
Check the Monthly portfolio of Schemes for April. It will show the month end AUM and not average AUM I guess. You have to download the XL file and s up the AUM of all their funds.
Results : Rs 28 dividend
Can someone explain how the accounting for Essel ncd works? What is the difference here in Other income & Other expense>
From Presentation-
The Company holds certain Non Convertible Debentures (NCDs) that are secured by a
pledge of listed equity shares. These NCDs are classified as financial assets at fair value
through profit and loss. Hence, any changes in their fair value on the reporting date is
reflected as a part of ‘Other Income’. In case where a fall in their value results in the
aggregate fair value of financial assets measured through profit and loss turning negative,
the aggregate amount is shown as ‘Other Expenses’.
On fair valuation of the said NCDs as at March 31, 2020, the unrealized loss recognized in
the results for the year ended March 31, 2020 stands at ₹1,203.60 mm as compared to
₹251.07 mm for the nine months ended December 31, 2019. As a result of this, the
changes in fair value of all financial assets measured through profit and loss for the year
ended March 31, 2020, in aggregate amounted to negative ₹33.95 mm which has been
shown as a component of Other Expenses. The carrying value of these NCDs as at March
31, 2020 was ₹294.21 mm. The value of the collateral as at March 31, 2020 is ₹358.78 mm.
Accounting has been done based IND-AS (indian version of IFRS) followed by all companies. HDFC AMC’s primary business is managing assets so any other business’s profits/ loss will go other income / other expenses as it not regular course of business. You can DM for more clarification on this accounting doubt
Standard life to sell stake via OFS (60 lac) at 7% discount price from today closing…pressure to persist.
Invested - plan to add more at lower levels
Stake sale is to bring down promoter holding per ceiling of 75%. Similar OFS was also carried out in HDFC life by standard life.
This is wrt HDFC AMC OFS and off-topic so this can be moved to another thread if required, but I believe this can help a lot of retail investors understand how OFS works to help us in the future issuances of companies.
The HDFC AMC OFS which concluded yesterday, had a floor price of Rs. 2362 with 10% shares earmarked for retail as per SEBI norms. That is 12 lac shares for retail out of 1.2 crore total on offer for sale.
I applied in the retail category and made a bid at the floor price itself 2362 (not the cut-off / market order).
The retail portion of the OFS went undersubscribed at 0.82x i.e. 9,87,191 shares bid. Now my understanding is - whomsoever bid for the OFS at >= 2362 i.e. floor price should get the allotment as the total retail portion itself is undersubscribed. However, I’ve not been given allotment because as per the NSE site, retail allotment price is Rs. 2386.1. But at that price 2386.1 or above - retail demand is much lesser than 12 lac shares (5-7 lac shares only out of the 12 lac)
https://www1.nseindia.com/live_market/content/live_watch/offer_sale/ofs_sale.htm
So my question is - how is there a 10% reservation for retail if the retail category was undersubscribed and within that anyone who bid between 2362 and 2386 was denied the allotment?
The cut-off price for retail got decided previous day as 2386.1 (basis the general category bid, I think) which was available on NSE website yesterday.
As per SEBI rule any bid below that will be rejected - also was mentioned.
Some of the online brokerages have option where the cut-off price automatically populates to this price decided previous day.
In OFS , the first offer is given to non retail and the price is discovered on that basis .In case the demand by non retail is at higher price, the floor price gets converted to minimum discovered price for retail which may be higher than floor price. Floor price loses its relevance subsequently. Once the retail subscription is rec’d, the retail allotment price is again discovered and that price may still be higher than minimum price for retail if demand is higher than retail share.In case the demand is lower than retail allocated share, the allotment to retail would be done at minimum discovered price and balance shares are allotted to left out non retail at discovered price. A similar thing happened in D mart last ofs wherein the retail allotment price was almost 200/_ higher than non retail.For any further clarification , you could directly write to me.
Rgds
Prashant Jain has sold quite a bit of his shares in the past week (3 lakh shares at ~75 cr.)
He said not much value at this level, when asked about non banking financial like amc
Thanks for sharing, believe he mentioned that for short term there may not be much expected but from long term there is value.
Few points to consider
This is one of growth story with super long runaway, now much reasonable valuations and asset light play - linked to financialization theme. Add to it mgmt quality. See all aspects of a steady compounder.
Invested and adding on dips.
HDFC AMC Annual Report 2020 Notes
Management Discussion & Analysis Report is a very good read on current economic situation in India and effects of Covid on economy in medium term. It also provides good insights into the current valuations of Indian equity markets and near term risks and opportunities. Mutual Fund Industry Insights highlights the growing trend of individual investor participation in the mutual funds industry. Management has repeatedly emphasised on the vast distribution network and different product offerings as the key reasons for company’s success.
1,915.18 Crore in FY 18-19 to 2,003.25 Crore in FY 19-20, due to an increase in investment management fee by 3.69% from 1,895.39 Crore in FY 18-19 to 1,965.28 Crore in FY 19-20. This increase was led by an increase in the Annual Average AUM of Mutual Fund schemes. Subsequent to the regulatory change in October 2018 referred to earlier, commission and certain other expenses related to the schemes of the Mutual fund which were earlier borne by the Company are now borne in the books of the schemes of the Mutual Fund which has had some effect in reducing the investment management fee. These regulatory changes were effective only for a part of FY 18-19 but for full period of FY 19-20. Hence, the growth rate of Investment Management Fees for the FY 19-20 was more subdued than that for FY 18-19.240.26 Crore in FY 18-19 to 20.89 Crore in FY 19-20, mainly on account of a decrease in commission expenses on sale of mutual fund schemes. Due to the regulatory changes mentioned above, no commission was paid by the Company on sale of mutual fund schemes from October 22, 2018 and the amounts charged relate to commissions paid to distributors on PMS and advisory mandates as well as some amortization of commissions paid in the past on sale of mutual fund schemes.38.50 Crore in FY 18-19 to 0.29 Crore in FY 19-20. Taking into effect of leases Operating Margins increased from 66% to 76% yoy.
3.44 Lakh Crore in March 2019 to 3.69 Lakh Crore in December 2019 but ended the year at ` 3.19 Lakh Crore due to the pandemic and its impact on equity markets.22.3 Lakh Crore as against a closing AUM of 23.8 Lakh Crore as of March 31, 2019. During this period, the equity oriented AUM fell from 10.2 Lakh Crore to 8.3 Lakh Crore while the non-equity oriented AUM grew from 13.6 Lakh Crore to 14.0 Lakh Crore. As can be seen from above, the fall in overall AUM can be attributed to the fall in equity oriented AUM, which fell by 19% due to the fall in market, primarily in the month of March 2020.Non equity AUM increasing majorly led by Liquid schemes. Equity AUM fell majorly bcoz of market crash in march 2020. Company gaining market share in non equity segment.
Direct channel sourcing increasing leading to better margins and lower dependency on banks.
Regards
Harshit Goel
