Chittorgarh.com Logo
Loading...

HUDCO IPO review (Apply)

Review By Dilip Davda on Apr 27, 2017

Housing & Urban Development Corp Ltd, popularly known as “HUDCO” that recently celebrated its 47th anniversary on 25th April 2017 and enjoying “Mini Ratna” status among PSUs is breaking the ice after a gap of 5 years (since April 2012) with a maiden IPO from a PSU. This wholly owned GoI Company is engaged in urban and rural housing as well as infrastructure project financing and has a track record of profit generation and dividend distribution since inception. It enjoys AAA rating for its debt plans from rating agencies like CARE, ICRA and IND Ra to have low cost debts.. Its housing finance loan is classified as social housing, residential real estate and retail finance (branded as Hudco Niwas). Under social housing Hudco is financing economically weaker sections/ lower income groups of the society.

For urban infrastructure finance, Hudco distributes loans relating to water supply, roads and transport (including railways and ports), power, SEZs, gas pipelines, oil terminals, telecom network, market complex, shopping centres, hotels, office buildings, sewerage, drainage, solid waste management etc.

As on 31st of December 2016 it had outstanding loan portfolio of around Rs. 36386 crore out of which around 30.86 per cent was for housing sector and the rest for infrastructure. 89.93 per cent of the total loan was to state governments and their agencies. It is enjoying the NIM of 4.2 per cent plus across the sector. On the said date its Gross NPAs were around 6.8 per cent and Net NPAs were around 1.51 per cent with a provision coverage ratio of 78.98 per cent. With this maiden IPO GoI is diluting 10.19 per cent by way of offer for sale of 204058747 equity share of Rs. 10 each in a price band of Rs. 56-60 per share to mobilize Rs. 1142.73 - 1224.35 crore (on the basis of lower and upper price bands). Issue opens for subscription on 08.05.2017 and will close on 11.05.2017. Minimum application is to be made for 200 shares and in multiples thereon, thereafter. Retail investors and eligible employees will get Rs. 2 discount on the final offer price. Post issue, shares will be listed on BSE and NSE. This being an offer for sale (secondary offer) the equity capital of the company remains same at Rs. 2001.90 crore. Its entire paid up equity has been issued at par since inception till July 2004. BRLM to this offer are IDBI Capital Markets & Securities Ltd, ICICI Securities Ltd, Nomura Financial Advisory and Securities (India) Pvt Ltd and SBI Capital Markets Ltd. Alankit Assignments Ltd is the registrar to the issue.

On performance front, the company has (on a consolidated basis) posted total revenue/net profits of Rs. 2921.34 cr. / Rs. 699.69 cr. (FY13), Rs. 3002.88 cr. / Rs. 733.97 cr. (FY14), Rs. 3427.85 cr. / Rs. 768.32 cr. (FY15) and Rs. 3350.08 cr. / Rs. 809.61 cr. (FY16). For first nine months of the current fiscal ended on 31.12.16 it has earned net profit of Rs. 496.86 cr. on revenue of Rs. 2677.99 cr. and the company hopes to maintain net level and EPS at the previous year’s level. Based on this the asking price is at a P/E of around 14 plus and at a P/BV of around 1.3 plus. It has no listed peer to compare with.

Company is set to play vital role in Pradhan Mantri Awas Yojna (PMAY) under Housing for All (HFA) by 2022 and thus has bright prospects going forward. It will have synergy with National Housing Bank for doing the needful in this segment. With Pan India presence, company is set to explore growth potentials.

On BRLM’s front, the four BRLMs associated with the offer have handled 29 public offers in the past 3 years, out of which 7 offers closed below the offer price on the listing date.

Conclusion: Being PSU offer for just 10 per cent of the total paid up capital and bright prospects for the segment in coming years, investors may consider investment for medium to long term.


Conclusion / Investment Strategy

Being PSU offer for just 10 per cent of the total paid up capital and bright prospects for the segment in coming years, investors may consider investment for medium to long term.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Apr 27, 2017

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

HUDCO IPO FAQs

  1. 1. Why HUDCO IPO?

    The initial public offer (IPO) of Housing and Urban Development Corporation Ltd offers an early investment opportunity in Housing and Urban Development Corporation Ltd. A stock market investor can buy HUDCO IPO shares by applying in IPO before Housing and Urban Development Corporation Ltd shares get listed at the stock exchanges. An investor could invest in HUDCO IPO for short term listing gain or a long term.

  2. 2. How is HUDCO IPO?

    Read the HUDCO IPO recommendations by the leading analyst and leading stock brokers.

    • Angel Broking - Apply
    • Choice Equity Broking Pvt Ltd - Apply
    • Dilip Davda - Apply
    • ET Intelligence Group - Apply
    • GEPL Capital Ltd - Apply
    • LKP Securities Ltd - Apply
    • SMC Global - Apply
    • S P Tulsian - Apply
  3. 3. HUDCO IPO what should investors do?

    HUDCO IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the HUDCO IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is HUDCO IPO good?

    Our recommendation for HUDCO IPO is to subscribe.

  5. 5. Is HUDCO IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the HUDCO IPO.

  6. 6. When will HUDCO IPO allotment status?

    The HUDCO IPO allotment status will be available on or around May 17, 2017. The allotted shares will be credited in demat account by May 18, 2017. Visit HUDCO IPO allotment status to check.

  7. 7. When will HUDCO IPO list?

    The HUDCO IPO will list on Friday, May 19, 2017, at BSE, NSE.

1 Comments

1. dipandesai  May 10, 2017 6:12:43 PM
latest gmp?