HUDCO makes strong debut; lists 22% premium to issue price
The Housing and Urban Development Society (HUDCO) scored Rs 73.45, a 22% premium over its initial IPO of Rs 60 on BSE. On the National Stock Exchange (NSE), opened the stock in Rs 73.
The reduction of Rs 2 per share issue price of Rs 60 was offered to retail employees and rights.
At 10:06, the stock traded at 76.65 Rs, after having reached the peak of Rs 77.80 on BSE, it publishes its list. In the NSE, rose from Rs 77.85 in intra-day trade so far. A combined quota of 84.01 million pieces won the accountant on BSE and NSE now.
HUDCO’s IPO saw strong investor demand and subscribed almost 80 times. The part reserved for qualified institutional buyers (QIB) was subscribed 55.45 times, non-institutional investors have recorded a subscription of 330.36 times and the category of retail investors was subscribed about 11 times.
HUDCO company, which offers loans for housing projects and urban infrastructure in India has recently increased by Rs 1,120 crore as part of its IPO, helping government efforts to meet its divestiture target.
The company enjoys strong relationships with state governments and their agencies and funds from various central government and state projects in the development of housing and urban infrastructure. In most cases, these loans are subject to the payment of allocations in government budgets or use of other sources of income, which reduces the risk of recovery of loans to state governments and their agencies.
“On December 31, 2016, the ratio of gross non-performing assets (NPA) to loans to governments of the states and their agencies was 0.75% compared to the gross NPA of 6.80%. State governments also contribute to the (weighted) equity (ICAC) share of 63.7% in December 2016 because the risk of these loans is “zero,” a Securities Note Checkout
Analysts remain optimistic about the way forward for the company and investors suggest they stay in the stock for the moment.
“We suggest to subscribe the issue and the shares was listed in a prize at its offer price of Rs 60. At the current market price, HUDCO trading at 1.8 times its adjusted book value. The stock with a target price of Rs.80 / which is approximately 2 times its current adjusted book value, “says G Chokkalingam, founder and CEO of Equinomics Research and Advice