The shares of this leading public finance company fell 10 percent in Wednesday’s trade after the Government of India planned to sell up to 7 percent stake, equivalent to 14,01,33,000 equity shares from the company through Offer for Sale(OFS) on October 18, 2023.
At 1:25 p.m. the shares of Housing and Urban Development Corporation(HUDCO) were trading at Rs. 80.90 down 10 percent from its previous day’s close price and the market capitalization of the company is Rs. 16,205 Crores.
According to the company’s filing, Housing and Urban Development Corporation’s Promoter i.e., the president of India, acting through the Ministry of Housing and Urban Affairs, has proposed to sell up to 7 percent stake in the company through an Offer for sale (OFS) on October 18 and the detailed information is as follows
On October 18, 2023, the promoter of HUDCO plans to sell a 3.50 percent stake in the company consisting of 7,00,66,500 equity shares of a face value of Rs. 10, and the offer will be open only for Non-Retail investors.
On October 19, 2023, the offer will be open for Retail Investors, and non-retail investors can carry forward their unallotted bids from the previous day for allocation to them in the unsubscribed portion of the Retail Category.
In addition to this, The Company promoters have the option to sell an additional 3.50 percent stake in the company consisting of 7,00,66,500 equity shares if the OFS gets oversubscription from the investors.
In the event the oversubscription option is exercised the equity shares forming part of the base offer and oversubscription offer will represent a 7 percent stake in the company consisting of 14,01,33,000 equity shares of the company.
The OFS shall take place during the trading hours on a separate window of the stock exchanges and the floor price is set at Rs. 79 per equity share.
The company’s revenue grew by 1.37 percent from 6,954.08 Cr in FY22 to 7,049.46 Cr in FY23, accompanied by decreasing profits of 1,716.41 Cr to 1,701.43 Cr.
The company has reported a return on equity (ROE) of 11.38 percent and a return on capital employed (ROCE) of 8.81 percent, this indicates that the company is struggling and making decent returns on its equity and capital employed.
According to the latest shareholding data available for the June 2023 quarter, the company’s Promoters hold 81.81 percent stake, the Domestic Institutional Investors hold 7.41 percent and the Foreign Institutional Investors (FII) hold 0.65 percent.
Housing & Urban Development Corporation Ltd is primarily engaged in the business of financing housing and urban development activities in the country.
Written by: Bharath K.S
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