The lock-in period became effective from October 1, 2015, when the bank started its operations.
The possibility of value unlocking could bode well for over 400,000 retail investors, WHO have been holding onto the shares of the company on expectations of gains.
However, the share price
movement has disappointed investors over the longer period. In one-year period, the stock price is down 14.85 per cent.
“Retail investors have been building heavy positions on the stock as they tend to show high interest in stocks that are low-priced, which allows them to corner larger chunk of shares for same capital,” said a dealer at a broking house.
On Thursday, the stock price closed at Rs 27.80, or 5.5 per cent higher.
The RBI recently formed an internal working group, which would be studying the current regulations on holdings of financial subsidiaries through non-operative financial holding company, which includes IDFC.
The company’s mutual fund (MF) business -- IDFC AMC AMC has also been seeing a steady growth. The AMC recently entered the Rs 1 trillion asset club (in October, 2019).
For June quarter, the AMC’s average assets under management (AAUM) stood at Rs 1,01,769 crore. It has also been among the top-ten players in the MF industry in terms of assets.
IDFC AMC’s valuation could come to about Rs 4,070 crore even assuming four per cent of the AMC’s AAUM (for June quarter). This is almost equal to the current market cap of IDFC, which stood at around Rs 4,437 crore at the end of Thursday’s trade.
Typically, the MF industry has seen deals at 5 per cent or higher valuations.
While the MF industry has gone through a phase of contraction amid the Covid-19 pandemic and lockdowns, IDFC AMC has been able to maintain a steady growth.
Its debt scheme performance, along with decent equity performance, has helped the AMC.
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