New Delhi: State-run Housing and Urban Development Corp. Ltd (Hudco) has received capital markets regulator Securities and Exchange Board of India’s approval to raise funds through an initial share sale as part of the government’s disinvestment drive.
Hudco had filed draft papers with the Sebi in January and got the markets watchdog’s “observation” on 10 March, which is necessary for any company to launch public offer. The initial public offer will comprise sale of 200,190,000 equity shares—10% stake—by the central government through an offer for sale (OFS) route, as per the Draft Red Herring Prospectus (DRHP).
A discount of up to 5% on the issue price would be given to retail investors and Hudco employees. The paid up capital of Hudco is Rs2,001.90 crore as of March 2016. The government holds 100% stake in the company.
IDBI Capital, Nomura Financial Advisory and Securities, SBI Capital Markets and ICICI Securities will manage the company’s public issue. The proceeds from Hudco disinvestment will form part of the government’s disinvestment kitty in the current fiscal.
The government expects to raise Rs56,500 crore through minority stake sale and strategic sale in PSUs this fiscal. Of this, Rs36,000 crore is to come from minority stake sale in PSUs and another Rs20,500 crore from strategic stake sale.
