Hudco IPO nears two-third mark on day one led by retail investors
Photo Credit: Akshansh Maan/VCCircle

State-owned Housing and Urban Development Corporation Ltd’s initial public offering (IPO) picked up pace on Monday, with the issue nearing the two-third mark on the first day, thanks to retail investors.

The IPO received bids for 129.13 million shares against the total issue size of 204.05 million shares, stock-exchange data showed.

Retail investors, whose investments cannot exceed Rs 2 lakh each, according to regulations, subscribed 1.52 times their quota, or 106.7 million shares compared to the 70.06 million reserved for the category.

The quota of shares reserved for institutional buyers was subscribed 17.5%, while that of the non-institutional investors, such as corporate houses and wealthy individuals, was covered 16%.

Hudco is seeking a valuation of Rs 12,011.4 crore ($1.87 billion) through the IPO.

The housing and urban infrastructure financier has fixed the price band for its offering at Rs 56-60 apiece. The IPO, which does not have an anchor book, will close on 11 May.

The government is divesting a 10.2% stake through the IPO. It hopes to raise Rs 1,224.35 crore at the upper end of the price band. The company is not selling any fresh shares.

Hudco was the first state-owned firm to go public since National Building Construction Corporation Ltd had floated its public offering in March 2012.

On the grey market, Hudco shares were quoting at a premium of Rs 27-28 apiece over its price band, two grey market dealers told VCCircle.

The grey market is a pseudo for over-the-counter market, where IPO shares are traded before the official listing on a stock exchange.

Hudco had filed the draft red herring prospectus for an initial share sale on 2 January, and received a clearance from Securities and Exchange Board of India on 10 March.

The company’s IPO is part of the government’s record disinvestment programme, through which it is looking to raise Rs 72,500 crore in 2017-18.

Of the total, the Centre aims to garner Rs 46,500 crore from minority stake sales in new listings as well as listed firms, Rs 15,000 crore from strategic sales and Rs 11,000 crore through listing of state-owned insurance companies, budget documents show.

Apart from Hudco, the government has initiated share sale in unlisted companies, such as Cochin Shipyard Ltd, IRCTC, IRFC, and Ircon International.

For more on Hudco IPO, click here.

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