PSU Watch logo

| Domestic flights to operate at full capacity from Oct 18 |   | Finance Minister to seek Cabinet nod for setting up company to monetise land asset of privatisation-bound CPSEs |   | Sitharaman's marathon meeting sessions with US businesses continues in New Yark |   | India will launch industry-led policies in space sector: ISRO Chief |   | No hike in fuel prices on Monday, relief for consumers facing historic high rates |  

HUDCO OFS subscribed 1.96 times on Day 1; govt to exercise green shoe option

On the opening day, the OFS of HUDCO received a good response from investors, prompting the government to exercise the green shoe option
HUDCO OFS subscribed 1.96 times on Day 1; govt to exercise green shoe option
HUDCO OFS subscribed 1.96 times on Day 1; govt to exercise green shoe option
  • At the end of the day on Tuesday, the HUDCO OFS was subscribed 1.96 times
  • Against the base issue size of over 9.90 crore shares, institutional investors have put in bids for 19.40 crore shares

New Delhi: On the opening day, the Offer for Sale (OFS) of Housing and Urban Development Corporation Ltd (HUDCO) received a good response from investors, prompting the government to exercise the green shoe option. In a tweet on Tuesday, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said, “The OFS of HUDCO got good response on day one. Issue subscribed nearly two times of base size by non-retail investors. Government has decided to exercise the green shoe option. Retail investors get chance to bid tomorrow.”

At the end of the day on Tuesday, the HUDCO OFS was subscribed 1.96 times. Against the base issue size of over 9.90 crore shares, institutional investors have put in bids for 19.40 crore shares, data sourced from NSE showed. 

HUDCO OFS

Through the OFS, the government is offloading 8 percent stake in HUDCO at a floor price of Rs 45 apiece. The OFS will open for retail investors on July 28. The sale of 8 percent stake in the state-run company would fetch the government around Rs 720 crore. The OFS comprises a base issue size of 5 per cent stake or over 11.01 crore shares, with an option to retain over-subscription of 2.5 per cent or over 5 crore shares.

In a regulatory filing to the stock exchanges on July 26, HUDCO had said, “On Day 1, that is July 27, HUDCO aims to sell up to 11,01,04,500 equity shares of the face value of Rs 10 each, representing 5.5 percent of the total paid-up equity share capital of the company. HUDCO may also use the option to additionally sell 5,00,47,500 (2.5 percent) equity shares of the company (the "Oversubscription Option") on Day 2 of the OFS.”

ALSO READ

The backdrop

The OFS comes as the government is looking to raise Rs 1.75 lakh crore from disinvestment in FY22. DIPAM, the nodal department under the Ministry of Finance responsible for formulating plans for and executing PSU disinvestments, has already raised Rs 7,646 crore through minority stake sale in this financial year so far. The department has raised Rs 3,651 crore is from NMDC OFS and Rs 3,994 crore from sale of SUUTI stake in Axis Bank.

(PSU Watch- India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)