The Rs 1,224 crore initial public offering (IPO) of state-run Housing and Urban Development Corporation (Hudco), a ‘Mini Ratna’ firm, will hit the capital market on Monday.
The government intends to sell 2,04,058,747 shares in the Rs 56-60 price band. The issue closes off on May 11.
The company focuses mainly on loans to state governments and agencies and plans to grow the housing finance portfolio going ahead. Out of the total of Rs 36,386 crore total outstanding loans, the housing finance business accounts for 30.9 per cent, while urban infrastructure finance loans and project-linked bonds account for the rest 69.1 per cent.
“The focus on the government-sponsored projects and ability to raise funds at a competitive price provides earnings visibility for many years. At the issue price band of Rs 56-60, the stock is offered at 1.25-1.35 times its 9MFY2017 book value, which we believe is reasonably priced, and hence, recommend subscribe to the is the issue.”
Given the current financial profile, growth prospects, and IPO valuations, investors with a long-term perspective can be advised to Subscribe, the brokerage said, adding that the stock is likely to provide listing gains due to market interest in the housing and urban infrastructure segment.