Shares of Housing and Urban Development Corporation (HUDCO), which made news earlier May for its stellar IPO subscription followed by a bumper listing on the stock exchanges, rose again today, extending their two-day rally on persisting news reports of further fundraising plans by the company and a large investor buying stake in it. HUDCO shares were trading up 5.3% at Rs 95 on BSE, after rising to a high of Rs 96.75. Meanwhile, BSE Sensex was up 0.73% and rose above 32,000 points for the first time ever.
Earlier this week, state-run lender HUDCO said that the company’s board will consider issuing debentures up to Rs 100 crore plus greenshoe option on Friday, July 14. Its shares are on fire since then, rising as much as over 36% in just three sessions, including today. After the news of the scheduled board meeting for considering the fundraising proposal, another unconfirmed news hit the market that a large investor has purchased HUDCO shares, as was reported by The Economic Times.
In May, HUDCO shares made a strong debut on stock exchanges, listing at a premium of over 22% to its issue price of Rs 60, following a massive 79 times subscription of its initial public offer. The IPO, which was open from May 8-11, raised over Rs 1,210 crore, as part of the government’s efforts to meet its disinvestment target. The issue comprised of a sale of 20,40,58,747 equity shares (10% paid-up capital) by the central government through an offer for sale (OFS).
A government company, HUDCO has more than 46 years’ experience in providing loans for housing and urban infrastructure projects in India. The company boasts of a strong financial performance including consistently increasing revenues and strong profitability. HUDCO’s sustained performance and profitability earned it the Miniratna status in fiscal 2005. While its earnings have improved, profitability has slipped a bit in the last six months. Nevertheless, net profit margin at 19.9% is still quite strong given its huge size.
As of 30 September 2016, HUDCO’s total assets under management (AUMs) were at about Rs 36,110 crore, which included housing finance assets of Rs 11,290 crore and urban infrastructure finances of Rs 24,820 crore.