Hudco stock tanks 9% as Centre weighs OFS route to offload 7% holding

The share price of Housing & Urban Development Corporation (Hudco) cracked 9.1 percent in early trade on October 18 as the government proposed to divest up to 7 percent of its stake in the state-run housing finance player through the OFS route.

The president, acting through the Ministry of Housing and Urban Affairs, gave the nod for the share sale in Hudco. The floor price for the offer has been fixed as Rs 79 per equity share, a regulatory filing noted.

As of 9.55am, the Hudco stock price was trading at Rs 82.45 on the NSE, lower by 8.34 percent. The offer price of Rs 79 comes at a 12.2 percent discount from the closing price on October 17.

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On the first day of the OFS, which is October 18, non-retail investors can bid for 3.5 percent or 7 crore shares of Hudco’s total paid-up equity share capital. In the event that the oversubscription option to additionally divest a further 3.5 percent stake is exercised, non-retail investors can carry forward their bids to Day 2 of the OFS on October 19, while retail investors can begin bidding.

Around 10 percent of the offer shares shall be reserved for allocation to retail investors. A minimum of 25 percent of the shares on offer will be for mutual funds. In the case of any unsubscribed portion from any form of investors, it will be offered to other non-retail investors who carried forward their bid from T1.

The offer is being taken so that the government can achieve the minimum public shareholding required by Sebi. As of September 2023, the promoter or the government’s holding in Hudco was 81.8 percent, unchanged over quarters. On the other hand, FIIs held merely 0.7 percent, while DIIs maintained a 7.2 percent stake from the previous quarter. The public had a stake of 10.4 percent in the firm.