HUDCO OFS receives underwhelming response from retail investors on last day

• On the final day of the offer, it was subscribed 0.27 times as bids were received for 29,45,472 shares against the base issue size of 1,10,10,450 shares
• Stock analysts had predicted that retail investors would give the HUDCO OFS a miss

New Delhi: After getting oversubscribed on day 1, the Offer for Sale (OFS) of state-run Housing and Urban Development Corporation Ltd (HUDCO) received an underwhelming response from retail investors on Wednesday, which was the closing day for the offer. The OFS had opened on July 27 for institutional investors and for retail investors on Wednesday. On the final day of the offer, it was subscribed 0.27 times as bids were received for 29,45,472 shares against the base issue size of 1,10,10,450 shares, data sourced from the NSE showed.

Stock analysts had predicted that retail investors would give the HUDCO OFS a miss as the near-term outlook for the company is uncertain because of volatility in its asset quality and delay in construction activities due to disruptions caused by the COVID-19 crisis.

HUDCO OFS

Through the OFS, the government has offloaded 8 percent stake in HUDCO at a floor price of Rs 45 apiece. The Centre has raised Rs 720 crore through the OFS, which will go towards meeting the 2021-22 disinvestment target. Following the OFS, the government's stake in HUDCO has declined to 81.81 percent. 

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.

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