Last updated: Oct 18, 2023 11:31 IST
Shares of Housing and Urban Development Corporation (Hudco) fell 9 percent to Rs 81.8 apiece on the BSE on Wednesday’s intraday after the government announced it would sell up to 7 percent stake in the housing finance company via an Offer for Sale (OFS).
The government plans to sell up to 3.5 percent of the shares through the OFS, with a greenshoe option to sell an additional 3.5 percent of the shares. Based on the base offer and over-subscription option, the government plans to sell up to 14.01 crore shares.
Non-retail investors can bid on the OFS today, Wednesday, while the offer for private investors opens on Thursday, October 19.
On Tuesday, the government said in a notice that it will sell a stake of up to 7 percent in the state-owned housing finance company this week through an offer for sale. This includes the sale of 3.5 percent of the company, with an option to sell a further 3.5 percent if the offer is oversubscribed.
However, the floor price for the sale has been set at Rs 79 per share, which is 12 percent lower than Tuesday’s closing price of Rs 89.9 per share.
At the end of the September quarter, the central government held 81.81 percent stake in Hudco. A sale of a 7 percent stake could fetch the government about Rs 1,100 crore.
The sale of the shares will help the government achieve the minimum public shareholding standard set by the capital market regulator, the exchange filing said. Minimum public shareholding standards require listed companies to maintain a stock market capitalization of at least 25 percent.
The government said such number of shares, equivalent to a maximum of 5 percent of the offered size, may be offered to eligible and willing employees of the company.
“The employees are eligible for shares up to Rs 5,00,000. The allotment to an employee shall not exceed Rs 2,00,000 and in case of under-enrollment in the employee section, the total allotment to an employee shall not exceed Rs 5,00,000,” the notification said.
Meanwhile, the company’s total revenues rose 5.35 percent year-on-year (year-on-year) to Rs 1,851.27 crore in the April-June quarter of FY24, compared to Rs 1,757.32 crore last year.
The company’s net profit also grew by 8 percent from Rs 411.71 crore year-on-year to Rs 445.65 crore. However, on a consecutive basis it was a decline of 30.27 percent.
Over the past three months, shares of Hudco have risen 52.5 percent on the BSE, against a decline of 0.2 percent in the benchmark Sensex index.
Moreover, the shares have almost more than doubled in the last six months with an increase of 98 percent from a level of Rs 45.46 per share. In comparison, the Sensex index has risen by around 11 percent during this period.