The issue that closes on May 11 is predicted to have a valuation between 1.25 to 1.35 times its December 31, 2016 book value.
New Delhi, May 8: Housing and Urban Development Corporation (Hudco) is offloading 20.4 crore equity shares with a net worth of Rs Rs 1,224 crore (at the upper end of the price band). A total of 10.19 per cent of the government stake is being disinvested and despite the company’s NPA loan and slow growth, investors are hailing it as an incredible low-risk opportunity. The company has over 46 years of experience in offering loans for housing and urban infrastructure projects across India.
These are some of the important things to know if you’re planning to invest:
2. The price band has been fixed as Rs 56 to Rs 60, with a face value of Rs 10 each. The floor price is 5.6 times the face value and the cap price is 6 times the face value. Bids can be made for a minimum of 200 equity shares and in multiples of 200 shares thereafter.
3. Retail individual bidders and HUDCO employees will be given a discount of 5 per cent or Rs 2 on the offer price. The discount is being provided to bidders bidding in the Retail Portion (Retail Discount) and eligible employees bidding in the Employees Reservation Portion (Employees Discount) respectively.
4. The valuation of this issue has been put at 1.3 times FY17, making this one an attractive proposition for investors.
5. Hudco Chairman and Managing Director M Ravi Kanth has revealed that HUDCO had an outstanding loan of Rs 36,385 crore as on December 31, 2016, reported Firstpost, adding that the company has been able to contain its NPA level despite turbulence in the financial market.