Hudco made a strong debut on bourses on Friday. The stock got listed on BSE at Rs 73.45, 22.41% above its issue price. Hudco ended the session at Rs 72.50, 20.83% above its issue price. Post listing, the stock commands a market capitalisation of Rs 1,479.43 crore. The initial public offering of Hudco was subscribed by 79.47 times. Investors bid for 1621 crore shares against the 20.40 crore shares on offer. The company has set the initial public offering (IPO) price band between Rs 56- 60, which will fetch the government Rs 1224 crore. The issue received bids for 555.03 crore shares from qualified institutional buyers of their quota of 10 crore shares. High-net-worth individuals bid for 992 crore shares of the 3 crore shares reserved for them, bidding 330.46 times.
Retail investors bid for nearly 10.61 times or 74.32 crore shares of the 7 crore shares reserved. Employees bid for 28.55 lakh shares of their quota of 38.68 lakh shares on offer. Hudco is a wholly owned government company involved in providing loans for housing and urban infrastructure projects in India. For the nine-month ended December 2016, the company posted a net profit of `496.29 crore.For the year ended March 31, 2016, the company posted a net profit of `810.6 crore, against Rs 768.32 crore in the previous year. Hudco is the first government-owned firm to go public since National Building Construction Corporation Ltd (NBCC) came with its public offering in March 2012.
The IPO is a part of the government’s disinvestment programme. The government is aiming to raise Rs 72,500 crore through divestment in the current financial year. Of the total, it aims to garner Rs 46,500 crore from minority stake sales through new listings as well as already listed firms, Rs 15,000 crore from strategic sales and Rs 11,000 crore through the listing of state-owned insurance companies. The government has also initiated stake sale in unlisted companies such as Cochin Shipyard Ltd, IRCTC, IRFC, IRCON, Hindustan Aeronautics Ltd and Airport Authority of India Ltd.
The government raised Rs 46,246.58 crore in FY 17 through buybacks, OFS, stake sales through central public sector enterprises exchange traded fund (CPSE ETF), and through divestment of strategic holdings in Specified Undertaking of Unit Trust of India (SUUTI). Of this Rs 7475.23 came through OFS in various companies. NHPC, HCL, NBCC, MOIL and BEL were among the companies in which the government sold stakes. IDBI Capital, Nomura Financial Advisory and Securities, SBI Capital Markets and ICICI Securities are book running lead managers to the issue.