Housing and Urban Development Corporation (HUDCO) ends with 21 percent gain
Updated on 19 May 2017
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Shares of Housing and Urban Development Corporation (HUDCO) listed at Rs 73.45, a 22% premium against its initial public offer (IPO) price of Rs 60 on the BSE. On the National Stock Exchange (NSE), the stock opened at Rs 73.
The stock settled at Rs 72.50, a 21% premium to its issue price, and 1.3% lower against its opening price. In intraday trade, the stock rallied as much as 30% to Rs 77.80 against its IPO price.
The discount of Rs 2 per share to the issue price of Rs 60 was offered to retail and eligible employees.
The IPO of HUDCO saw huge demand from investors and was subscribed nearly 80 times. The portion reserved for qualified institutional buyers (QIBs) was subscribed 55.45 times, non-institutional investors saw a subscription of 330.36 times and retail investor's category was subscribed about 11 times.
The state-run HUDCO, which provides loans for housing and urban infrastructure projects in India, recently raised over Rs 1,120 crore as a part of its IPO, assisting the government's efforts to meet its disinvestment target.
The company enjoys strong relationship with the state governments and their agencies and finances various central and state government schemes in housing and urban infrastructure development. In most cases these loans are subject to repayment through allocations in state government budgets or recourse to alternate sources of revenue, which reduces the recovery risk of loans to state governments and their agencies.