HUDCO Is India’s First State-Owned Company IPO In Five Years
The government is looking to raise Rs 1,200 crore through the IPO.
Housing and Urban Development Corporation Ltd. (HUDCO) will be the first government-owned company in five years to go public. The last one was National Buildings Construction Corporation Ltd. (NBCC), which listed in March 2012.
The urban infrastructure lender is looking to raise up to Rs 1,224 crore through a 10.2 percent stake sake by the central government. More than 20 crore equity shares will be on offer at a price band of Rs 56-60 per share. This values the company at Rs 12,000 crore. The three-day initial public offering (IPO) will open on May 8.
The 46-year-old company provides loans for housing and urban infrastructure projects in India and a majority of its revenue comes from urban infrastructure finance. State government agencies make up for 90 percent of the company’s borrowers, according to its red herring prospectus and Director-Finance, Rakesh Kumar Arora told BloombergQuint that the lender was in no hurry to lend more to the private sector.
HUDCO has a net worth of Rs 8,908 crore, which translates to a book value of Rs 44.5 per share. Its price-to-book value ratio is higher than other listed infrastructure finance companies, but much lower than housing finance companies in India.
Its revenue and profit rose at a compounded annual growth rate (CAGR) of five and seven percent, respectively. For the nine-months ended December 2016, HUDCO reported a total revenue of Rs 2,678 crore and a net profit of Rs 497 crore. Gross non-performing assets stood at 6.8 percent of the total assets, while the provision coverage ratio was 78.98 percent of the total loan portfolio.