Shares of state-owned Housing and Urban Development Corporation (Hudco) made a strong debut on stock exchanges today. Hudco shares surged as much as 30 per cent to Rs 77.85 on National Stock Exchange compared to its issue price of Rs 60. Analysts were expecting a strong listing for Hudco shares after an overwhelming response to its initial public offer (IPO), which was purely an offer for sale by Government of India. Hudco's IPO was subscribed nearly 80 per cent. The Qualified Institutional Buyers portion was subscribed more than 55 times with about 38 per cent demand from foreign institutional investors (FIIs). Non-institutional category was subscribed more than 330 times and the retail category also saw a strong demand of more than 10 times.
The Rs 1,200 crore initial public offer of Hudco received bids worth Rs. 97,000 crore, thereby recording the highest over-subscription in any PSU disinvestment, the government had said earlier.
Hudco primarily lends to urban infrastructure projects relating to water supply, roads and transport and power accounting for 69 per cent of the loan book. It also lends towards housing finance, which forms the balance 31 per cent of the loan book. Both the segments have vast untapped opportunity in India, which would provide potential growth opportunity for Hudco to scale up its operations, Angel Broking said in a note.
Meanwhile, Hudco is going to play a major role in Prime Minister Narendra Modi's Pradhan Mantri Awas Yojana scheme, which aims to provide subsidised housing loans to middle and income group, analysts say.
Hudco had reported a net profit of Rs 496 crore on net interest income (NII) of Rs 1,104 crore for the first nine months of last fiscal. At the issue price of Rs 60, Hudco shares were valued at 1.35 times its FY2017 estimated book value, which is a reasonable valuation, said Angel Broking.
Hudco shares closed 20.91 per cent higher at Rs 72.55.
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