Information Note HDFC Asset Management Company Limited

Premia Research Issue Opens: 25-July-2018; Issue Closes: 27-July-2018; Price Band: `1,095-1,100 Issue Details This document summarizes a few key points related to the issue and should not be treated as a comprehensive summary. Investors are requested to refer the Red Herring Prospectus for further details regarding the issue, the Face Value: `5 issuer company and the risk factors before taking any investment decision. Please note that investment in Public offer ~2.55cr shares securities is subject to risks including loss of principal amount and past performance is not indicative of future performance. Nothing herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do Reservation so. This document is not intended to be an advertisement and does not constitute an invitation or form any part of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this a) HDFC AMC Emp 3.2lakh shares document nor anything contained herein shall form the basis for any contract or commitment whatsoever. b) HDFC Emp 5.6lakh shares Company Overview c) HDFC shareholder 24lakh shares HDFC Asset Management Company Ltd (HDFC AMC) has been the Net offer ~2.22cr shares most profitable asset management company in in terms of net Price Band `1,095-1,100 profit since FY13, according to CRISIL. It operates as a joint venture Issue Size# `2,800cr between HDFC Ltd. and Standard Life Investments Ltd. As of March Bid lot 13 equity shares 31, 2018, (a) equity-oriented AUM and non-equity-oriented AUM 100% book Issue Type building constituted `1,49,713cr and `1,42,273cr respectively of its total Post Issue Market Cap#: ` 23,319cr; Note: # - at upper AUM; (b) its market share of total AUM was 13.7% among all asset band

% Shareholding Pre IPO Post IPO management companies in India, according to CRISIL. Promoter 94.95 82.94 Offer Details Public 5.05 17.06 The offer consists of an Offer for Sale of up to 2.55cr equity shares. Source: RHP Key Positives

Share Reservation % of Net offer CRISIL’s analysis shows that the industry’s AUM (excluding gold ETF QIB 50 and FOF) will grow at CAGR of 18.6% from March, 2018 to March, NII 15 2023. The company, due to its leadership and diversified products Retail 35 offerings, would benefit from the growth trajectory of industry. As of

Company Management March 31, 2018, company offered 133 schemes that were classified Milind Barve MD into 27 equity-oriented schemes, 98 debt schemes (including 72 fixed Piyush Surana CFO maturity plans), three liquid schemes and five other schemes. This diversified product mix provides it the flexibility to operate Issue Managers IIFL Holdings Ltd., Kotak successfully across various market cycles and address market Mahindra Capital Co. Ltd., Axis fluctuations. Its AUM has grown at CAGR of 25.5% between March Capital Ltd, DSP Merrill Lynch 31, 2013 and March 31, 2018. Ltd, Global Markets India Pvt. Ltd., CLSA India Pvt. Financial Summary BRLMs Ltd, HDFC Bank Ltd, ICICI Consolidated `Cr FY15 FY16 FY17 FY18 Securities Ltd, JM Financial Revenue from operations 1,022 1,443 1,480 1,760 Ltd, J.P. Morgan India Pvt Ltd, Growth (%) yoy 19.1 41.1 2.6 18.9 India Co. Pvt. EBITDA* 591 668 704 966 Ltd, Nomura Financial Advisory and Sec. (India) Pvt. EBITDA margin (%) 57.8 46.3 47.6 54.9 Registrar Karvy Computershare Pvt. Ltd Reported PAT 416 478 550 722 EPS-Diluted (`) 20.3 23.6 27.1 35.0 Analyst – Tushar Jain RoNW (%) 41.1 42.1 42.8 40.3 [email protected] Source: RHP, Company, IIFL Research; (EBITDA = Revenue from operations – Employee benefit exps – Other exps) July 24, 2018 For additional information and risk factors please refer to the Red Herring Prospectus. Please note that this document is for information purpose only.

HDFC Asset Management Company Limited

Premia Research Key Points

Consistent leadership position in the mutual fund industry It has been a leader in the Indian mutual fund industry as demonstrated by its leading position across key industry metrics. It has consistently been among the top two asset management companies in India in terms of total average AUM since August, 2008, according to CRISIL. Its proportion of equity-oriented AUM to total AUM was at 51.3%, which was higher than the industry average of 43.2%, as of March 31, 2018, according to CRISIL.

Superior and diversified product mix It offers a wide range of investment schemes across asset classes catering to various risk return profiles, many of which have recorded strong and consistent performance compared to industry benchmarks. Its diversified product mix enables it to cater specific customer requirements and reduce concentration risk. As of March 31, 2018, it served customers in over 200 cities through Pan-India network of 209 branches (and a representative office in Dubai).

Key Risks

Underperformance of investment products The performance of its scheme is important to retain existing customers as well as attract new customers. The performance of its scheme is dependent on general market conditions and existing competition in the market. Poor investment performance, either on an absolute or relative basis, could impair revenue.

Dependency on promoter’s brand and reputation Its revenue, results of operation, business and prospects depend on the strength of the brand and reputation of Promoters, HDFC Ltd and Standard Life Investments Ltd and their group entities to a certain extent. Any reputational harm to HDFC or Standard Life Investments group entities may also negatively affect its brand and reputation.

Disclaimer Premia Research

IIFL Holdings Limited and IIFL Securities Limited (Formerly ‘India Infoline Limited’) (part of the India Infoline Group) are involved in the initial public offering of HDFC Asset Management Company Ltd, in the capacity of a Book Running Lead Manager and a Syndicate Member to the Issue. However, IIFL Holdings Limited and India Infoline Limited shall not be in any way responsible for the contents hereof, any omission therefrom or shall be liable for any loss whatsoever arising from use of this document or otherwise arising in connection therewith, including with respect to forward looking statements, if any. Neither IIFL Holdings Limited nor India Infoline Limited or any of its affiliates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.

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IIFL Securities Limited (Formerly ‘India Infoline Limited’), CIN No.: U99999MH1996PLC132983, Corporate Office – IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, – 400013 Tel: (91-22) 4249 9000. Fax: (91-22) 40609049, Regd. Office – IIFL House, Sun Infotech Park, Road No. 16V, Plot No. B-23, MIDC, Thane Industrial Area, Wagle Estate, Thane – 400604 Tel: (91-22) 25806650. Fax: (91-22) 25806654 E-mail: [email protected] Website: www.indiainfoline.com, Refer www.indiainfoline.com for detail of Associates.

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