Know these before you apply for HUDCO IPO

Government-run Housing and Urban Development Corporation (HUDCO) is ready to hit the D-Street on May 8, 2017. The IPO comes following the government’s decision to divest some of its stake in the public-sector enterprises.

Following are the few things to know before applying to the HUDCO IPO:

1)      The IPO is going to open on May 8, 2017 and closes on May 11, 2017. It is going to follow the book building process wherein the price band is pegged at Rs 56 to Rs 60 per equity share. The investors need to apply for minimum of one market lot which consists of 200 shares. The IPO is going to raise Rs 1224.35 Cr by issuing 20,40,58,747 equity shares with face value of Rs 10 per equity share.

2)      HUDCO is the government owned company which provides loans for the housing and development projects in the country. It helps government to incorporate various infrastructure related schemes.

3)      The primary objective of the IPO is to follow the government’s divestment plans. As per the leading national daily, the company actually do not need any fresh fund raising and is capable to further divest 15%.

4)      The company’s financing activities falls in two categories of social housing and residential real estate and retail finance. The borrowers of the company include weaker sections in the society. The company’s mission is to promote sustainable habitat development to enhance the quality of life of the people.

5)      The company needs to pay a minimal annual dividend of 30% of its profits after taxes or 5% of its net worth, whichever is higher, according to the CPSE Capital Restructuring plans.

6)      As per the company’s financial data, the company reported a net profit of Rs 347.55 Cr for the first half of the financial year 2017. The net interest income for the same period stands at Rs 696.89 Cr.