The initial public offering (IPO) of state-owned Hudco was subscribed by over 3 times on Tuesday, the second day of its offer. Investors bid for 61.39 crore shares against the 20.40 crore shares on offer. The company has priced its IPO, which will fetch the government Rs 1,224 crore, between Rs 56 and Rs 60.
The issue received bids for 29.58 crore shares from qualified institutional buyers (QIB) of their quota of 10 crore shares. High-net-worth individuals bid for 2.82 crore shares of the 3 crore shares reserved for them, bidding 0.94 times. Retail investors bid for nearly 4.12 times or 28.90 crore shares of the 7 crore shares reserved. Employees bid for 8.28 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 nine months ended December 2016, the company posted a net profit of Rs 496.29 crore.For the year ended March 31, 2016, the company posted a net profit of Rs 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 (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, IRCTC, IRFC, IRCON, Hindustan Aeronautics and Airport Authority of India.
The government raised Rs 46,246.58 crore in FY17 through buybacks, OFS, stake sales through 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.