Mumbai, March 15: The Housing Development Finance Corporation (HDFC) today decided to divest up to 10 per cent of its stake in HDFC Asset Management Company, its mutual fund subsidiary.
The housing finance major has also decided to infuse a maximum of Rs 65 crore as fresh capital in the AMC to facilitate an acquisition, the company informed the Bombay Stock Exchange.
The board has allowed infusion of additional capital through equity or preference shares, the letter said. Industry circles expect HDFC’s foreign partner Standard Life Investments to acquire the 10 per cent equity stake at a hefty premium and thereby taking its holding in HDFC Asset Management Company above 50 per cent.
HDFC Mutual Fund has been eyeing acquisitions for a long time now. Its ambitions became public when reports said it was one of the prime contenders for acquiring Alliance Mutual Fund. The matter came to naught when the foreign promoters of Alliance Mutual Fund decided to stay put with the Indian subsidiary.
HDFC’s asset management arm was one of the late entrants in the mutual fund industry in India.
However, by virtue of its brand name it made impressive inroads into the company. HDFC Asset Management Company (AMC) was incorporated on December 10, 1999, and was approved to act as an asset management company for the mutual fund by Sebi on June 30, 2000. The mutual fund is primarily sponsored by HDFC. Partnering HDFC's asset management company is Standard Life Investments, which is also its partner in life insurance.