The share price of Housing & Urban Development Corporation (Hudco) experienced a sharp decline of 9.1 percent in early trading on October 18. This decline is following the government’s announcement of its intention to divest up to 7 percent of its stake. In the state-run housing finance company through the Offer for Sale (OFS) route.
Government Approval for Hudco Share Sale
The President, acting through the Ministry of Housing and Urban Affairs, granted approval for the share sale in Hudco. The floor price for the offer has been fixed at Rs 79 per equity share, according to a regulatory filing.
Hudco Share Price Update
Hudco Share Price UpdateAs of 9:55 am, Hudco’s stock price was trading at Rs 82.45 on the NSE, marking an 8.34 percent decrease from the previous day’s closing price. At 12:28 pm it was trading at Rs.81.30 marking an 8.65 percent decrease. Notably, the offer price of Rs 79 represents a 12.2 percent discount from the closing price on October 17.
OFS Details and Investor Participation
On the first day of the OFS, which commenced on October 18. In this day non-retail investors were eligible to bid for 3.5 percent or 7 crore shares of Hudco’s total paid-up equity share capital. In the event of an oversubscription, granting an additional 3.5 percent stake divestment option. Non-retail investors could carry forward their bids to Day 2 of the OFS on October 19, while retail investors could commence their bidding.
Reservation for Retail Investors and Mutual Funds
Approximately 10 percent of the offer shares have been reserved for allocation to retail investors. A minimum of 25 percent of the shares on offer will be allocated to mutual funds. Any unsubscribed portion from any category of investors will be offered to other non-retail investors who carried forward their bids from T1.
Meeting SEBI’s Public Shareholding Requirement
The government is initiating this offer to fulfill the minimum public shareholding requirement mandated by the Securities and Exchange Board of India (SEBI). As of September 2023, the promoter or government’s holding in Hudco remained at 81.8 percent, consistent over multiple quarters. Foreign Institutional Investors (FIIs) held a mere 0.7 percent. While Domestic Institutional Investors (DIIs) maintained a 7.2 percent stake from the previous quarter. The public held a stake of 10.4 percent in the company.
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