HUDCO Shares Fall 9% As Govt Launches Stake Sale Via OFS; Details

Shares of Housing and Urban Development Corporation (Hudco) tumbled 9 per cent to Rs 81.8 apiece on the BSE in Wednesday’s intraday after the government announced it would sell up to 7 per cent stake in the housing finance company through an Offer for Sale (OFS).

The government plans on selling up to 3.5 per cent equity through the OFS with a greenshoe option to sell another 3.5 per cent stake. Based on the base offer and oversubscription option, the government plans on selling up to 14.01 crore shares.

Non-retail investors can bid in the OFS today, i.e. Wednesday, while the offer for retail investors will open on Thursday, October 19.

On Tuesday, the government said in a notification that it will sell up to a 7 per cent stake in the state-run housing finance company through an offer for sale this week. This includes selling 3.5 per cent of the company, with an option to sell an additional 3.5 per cent if the offer is oversubscribed.

The floor price for the sale, however, has been set at Rs 79 apiece, which is 12 per cent lower than Tuesday’s closing price of Rs 89.9 per share.

At the end of the September quarter, central government held 81.81 per cent stake in Hudco. A sale of 7 per cent stake could fetch the government around Rs 1,100 crore.

The stake sale will help the government to achieve the minimum public shareholding norm set out by the capital market regulator, the exchange filing said. Minimum public shareholding norms require listed companies to maintain a public float of at least 25 per cent.

The government said such number of equity shares, as would be equivalent to up to 5 per cent of the offer size, may be offerd to eligible and willing employees of the company.

“The employees will be eligible for shares up to Rs 5,00,000. The allotment to an employee will be up to Rs 2,00,000, and in the event of undersubscription in the employee portion, the total allotment to an employee shall not exceed Rs 5,00,000,” the notification said.

Meanwhile, in the April-June quarter of FY24, the company’s total income increased 5.35 per cent year-on-year (YoY) to Rs 1,851.27 crore as against Rs1,757.32 crore reported last year.

The company’s net profit also grew by 8 per cent to Rs 445.65 crore from Rs 411.71 crore YoY. It however, was a 30.27 per cent decline on a sequential basis.

Over the past three months, shares of Hudco have surged 52.5 per cent on the BSE as against 0.2 per cent dip in the benchmark Sensex index.

Further, over the past six months, the shares have nearly more-than-doubled by zooming 98 per cent from a level of Rs 45.46 per share. By comparison, the Sensex index has surged around 11 per cent during the period.