The HDFC Group of Multibaggers... - Chart Of The Day 6 August 2018 - Equitymaster

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The HDFC Group of Multibaggers...
Aug 6, 2018

The IPO of HDFC Asset Management Company closed on Thursday, 27 July 2018.

At the end of the third day, the IPO was subscribed a whopping 83 times!

It listed today at a 58% premium.

I'd recommended my Insider members to subscribe to the IPO given the rock-solid fundamentals, top notch management quality, and the massive demand for the IPO. In fact, I even showed my readers how they could make two application via the HDFC shareholder reservation category as well as the retail category.

Now, the question is: Why such a crazy rush for this IPO?

The short answer is the HDFC brand. The HDFC Group stocks have been such phenomenal wealth-creators that no investor wants to miss any opportunity to pick up a stock with the HDFC brand tag.

Today's chart of the day shows the number of times you could have multiplied your wealth by being an early investor in any HDFC Group company.

In the chart above, I've taken the earliest available prices for HDFC Ltd, HDFC Bank, and Gruh Finance. The returns translate as below:

HDFC Ltd delivered compounded returns of 28% over 28.6 years.

HDFC Bank delivered compounded returns of 27% over 23.2 years.

Gruh Finance delivered compounded returns of 22% over 25.5 years.

HDFC Standard Life Insurance delivered absolute gains of 75% in a little over eight months from its issue price of Rs 290 per share.

In my premium newsletter Insider, I'd also recommended one HDFC Group company as a long-term investment. It's currently slightly above the recommended maximum buy price. But should it correct, it could be a lucrative opportunity to build long-term wealth.

Data Source: Ace Equity, Spider Software India

*Returns calculated since: HDFC Ltd: 4 Jan 1990; HDFC Bank: 26 May 1995; Gruh Finance: 28 Jan 1993; HDFC Standard Life Insurance: Nov 2017 Issue price

This Chart Of The Day was published in The 5 Minute WrapUp - My First Lesson in Permanent Wealth When I Was 18

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