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Govt To Sell 8% Stake In HUDCO Through OFS

HUDCO

Institutional investors can purchase up to 8% of the government’s holding in HUDCO at a minimum price of Rs 45 per share today, informed by a tweet by the Secretary, Department of Investment and Public Asset Management. 

HUDCO, an acronym of  Housing and Urban Development Corporation Limited,  is a government-owned organization that is governed by the Ministry of Housing and Urban Affairs.

With this sale of around 16.01 crore shares, or an 8% stake, the government can bring in Rs 720 crore for it.

The government is selling more than 5% of its stock, or over 11.01 crore shares, through an offer-for-sale, with the possibility of keeping a 2.5 per cent over-subscription, or over 5 crore shares (OFS).

“Offer for Sale of GoI equity in HUDCO opens tomorrow for non-Retail investors. Day 2 for Retail investors. The government would divest 5.5% shares with an additional 2.5% as Green Shoe Option (sic),” Secretary, DPIAM, tweeted on July 26.

 

The share sale in HUDCO via the OFS method has been approved by President Ram Nath Kovind, acting via the Ministry of Housing and Urban Affairs, Government of India.

HUDCO plans to sell up to 11,01,04,500 equity shares with a face value of Rs 10 apiece on Day 1, which is July 27. This represents 5.5 per cent of the company’s total paid-up equity share capital.

If the government uses an over-allotment option and sells the whole 8% stake in the public sector undertaking, the government’s investment in the firm will fall to 81.81 per cent (PSU).

Unallocated bids from institutional or non-retail investors will be carried forward to the next day for allocation from the unsubscribed part for retail investors. On July 28, the issue will be available to retail investors.

As part of its plan to fulfil its Rs 1.75 trillion divestment objective, the government is selling its share in a PSU through an OFS for the second time this fiscal year, the first one was NMDC. Its announcement happened on July 6 this year.  In the current fiscal year, the government has collected Rs 7,646 crore from NMDC’s OFS and the sale of a share in Axis Bank.

 

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Harshita Sharma

A financial news enthusiast and a keen observer of the stock market, I bring to you all the updates from the world of business and finance. So, check out my posts and stay tuned with the major (informational) happenings.

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