Introduction

The session throws light on the following

• Understanding the AMC Industry - Key Products, Consumers, Various Parties
• Assumptions for Revenue Drivers
• Assumptions for Cost Drivers
• Discounted Cash Flow Analysis (DCF Valuation)
• Relative Valuation using the Multiples
• Understanding the International Markets and Way Forward

Objective

Think about it, India's GDP is at close to USD 3 Trillion and growing at 8-10% per year (nominal basis). Indians have a tendency to save close to 25% that's like USD 700 Bn (which is equivalent to Rs. 50 lakh crores) and most of the money either goes to Deposits, Real Estate or Gold. The cumulative Assets under Management of the Mutual Fund Industry is less than USD 400 billion (When compared to the annual saving)

However, the scenario has been changing in the last decade. The AUM of the Indian MF industry has grown from Rs. 8 Lakh Crore on 31st January 2010 to Rs. 28 Lakh Crore as on 31st January 2020, showing more than 3.5x fold increase in a span of 10 years. The number of folios continue to grow. And as per AMFI, no of folios in Mutual Fund has grown for 68th Consecutive Month as of Jan 2020.

In this session we try and dissect the Industry and the Company. We look at how HDFC AMC continues to grow and why does it command a premium over other players in India's Growing AMC space. We also build a valuation model for the company, and also evaluate the upcoming UTI AMC IPO.