The initial public offering of state-owned Housing and Urban Development Corporation Ltd (Hudco) was covered three times on the issue’s second day on Tuesday, thanks to strong demand from institutional and retail investors.
The housing and urban infrastructure financier’s offering of nearly 204.05 million shares had received bids for nearly 614 million shares, stock-exchange data showed.
The quota for retail investors—whose investments cannot exceed Rs 2 lakh each—was subscribed about 41.2 times. The quota of shares reserved for institutional buyers was subscribed nearly three times, while that of the non-institutional investors, such as corporate houses and wealthy individuals, was covered nearly 95%.
The IPO had covered nearly two-third distance on the first day of bidding on Monday.
The IPO, which does not have an anchor book, will close on Thursday.
Hudco is seeking a valuation of Rs 12,011.4 crore ($1.87 billion) through the IPO. The company has fixed the price band for its offering at Rs 56-60 apiece.
The government is divesting a 10.2% stake through the IPO and will raise Rs 1,224.35 crore at the upper end of the price band. The company is not selling any fresh shares.
Hudco is the first state-owned firm to go public since National Building Construction Corporation Ltd floated its public offering in March 2012.
On the grey market, the premium on Hudco shares rose to Rs 30-32 apiece over its IPO price band on Tuesday compared with a premium of Rs 27-28 on Monday, two grey market dealers told VCCircle.
The grey market is an over-the-counter market, where shares are traded before listing on a stock exchange.
Hudco had filed the draft red herring prospectus for an initial share sale on 2 January, and received clearance from the 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.
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