The offering, which will close on 11 May, has been priced in a band of Rs56-60 per share. It comprises a net offer to the public of 200.19 million shares, which, at the upper end of the price band, could fetch the government Rs1,201.1 crore.
The Hudco IPO is a pure offer for sale which will see the government sell a 10% stake in the company. Hudco will not receive any proceeds from the sale of shares.
IDBI Capital Markets and Securities Ltd, ICICI Securities Ltd, Nomura Financial Advisory and Securities (India) Pvt. Ltd and SBI Capital Markets Ltd are managing the initial share sale.
State-owned Hudco has been providing loans for housing and urban infrastructure projects in India for more than 46 years. The company, which provides housing loans across three categories— social housing, residential real estate and retail finance—has been conferred the Miniratna status (Category-I public sector enterprise) by the government of India.
Hudco’s total outstanding loan portfolio as of 31 December was Rs36,385.8 crore, comprising 30.86% of housing finance loans and 69.14% of urban infrastructure finance loans and project-linked bonds.
On the urban infra side, Hudco lends for projects relating to water supply; roads and transport, which includes railways and ports; power; emerging sectors, which includes special economic zones, industrial infrastructure, gas pipelines, oil terminals and telecom sector projects; commercial infrastructure and others, which includes shopping centres, market complexes, malls-cum-multiplexes, hotels and office buildings.
As per the red herring prospectus filed by the firms, it reported revenue of Rs3,350 crore in financial year 2015-16, compared with Rs3,427.8 crore in the previous year. In 2015-16, the company reported a profit of Rs810.6 crore, compared with Rs768.3 crore in the previous year.
The Hudco IPO will be the first initial share sale by a government-owned entity this year. The Union government, which is chasing a target of raising Rs72,500 crore through various divestment routes, has rolled out programmes for listing of various state-owned enterprises.
On 24 April, Mint reported New India Assurance Co. Ltd (NIA) and General Insurance Corp. of India Ltd (GIC) had hired investment banks to manage their IPOs as the government seeks to pare its stake in the state-run insurers. The government is likely to raise more than Rs10,000 crore by selling its shares to the public.
To abide by the mandated 25% public shareholding in listed firms and unlock their value, the Cabinet Committee on Economic Affairs on 13 April approved listing of 11 central public sector enterprises, Mint reported.
The list includes railway subsidiaries Rail Vikas Nigam Ltd, IRCON International Ltd, Indian Railway Finance Corp. Ltd, Indian Railway Catering and Tourism Corp. Ltd (IRCTC) and RITES Ltd.
Other state-owned firms that have been cleared for IPOs include three defence ministry enterprises—Bharat Dynamics Ltd, Garden Reach Shipbuilders and Engineers Ltd and Mazagon Dock Shipbuilders Ltd—MSTC Ltd and Mishra Dhatu Nigam Ltd, controlled by the steel ministry, and North Eastern Electric Power Corp. Ltd, which is under the power ministry.
Another state-owned firm, Cochin Shipyard Ltd, has filed its draft IPO prospectus with the markets regulator Sebi and is awaiting approval on the same.
So far in 2017, five companies have raised Rs4,185.9 crore through the IPO route, data from primary market tracker Prime Database shows.