HDFC AMC hits new 52-week low on MSCI exclusion; stock down 18% in a month

Shares of HDFC Asset Management Company (AMC) hit fresh 52-week low of Rs 1,809.05, down 2 per cent on the BSE in Friday’s intra-day trade in an otherwise firm market. The decline comes after index provider MSCI excluded the stock in its global indices.

At 11:18 am; HDFC AMC traded 1 per cent lower at Rs 1,827, as compared to 1 per cent rise in the S&P BSE Sensex at 53,485 points. In the past one month, the stock underperformed market by falling 18 per cent, against 8 per cent decline in the benchmark index. The stock has almost halved or down 46 per cent from its 52-week high level of Rs 3,363 that it had touched on September 9, 2021.

From India, MSCI has added 4 stocks - Adani Power, AU Small Finance Bank, Jindal Steel and Power, and Tata Elxsi, whereas, deleted HDFC AMC. The changes announced by MSCI will be effective from June 1.

HDFC AMC is the investment manager to HDFC Mutual Fund, one of the largest and profitable mutual funds with a quarterly average asset under management (QAAUM) of around Rs 4.3 trillion as on March 2022 (Q4FY22). With a market share of 10.8 per cent, the company has strong distribution network of 228 branches and over 75,000 empanelled distribution partners.

HDFC AMC’s share price has grown over 11 per cent since its listing in August 2018. Analysts believe that the correction in stock price over the past few months provide a good entry opportunity.

In Q4FY22, HDFC AMC saw slower growth than industry as its AUM was up 3.1 per cent YoY and down 6.7 per cent QoQ to Rs 4.1 trillion. On the other hand, equity AUM rose 21 per cent YoY, forming 49 per cent of the total AUM. Besides that, debt and liquid segment witnessed AUM decline of 14 per cent YoY each and together form 46 per cent of total AUM.

"HDFC AMC continued to witness a decline in market share from 12.6 per cent at the beginning of the fiscal to 10.8 per cent by March 2022. Equity AUM (actively managed) market share also declined from 12.9 per cent in March 2021 to 11.4 per cent in December 2021 and further to 11.3 per cent by March 2022 while debt segment saw market share decline of 100 bps sequentially to 13.8 per cent," said analysts at ICICI Securities.