HUDCO IPO – May 2017 Issue

by Shiv Kukreja on May 5, 2017

in Uncategorized

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

HUDCO IPO Review

 

HUDCO, a wholly-owned Miniratna of the Government of India, is all set to enter the primary markets and will launch its initial public offer (IPO) from the coming Monday i.e. 8th of May. It will be the first divestment candidate of the government for the current fiscal year. The government has fixed its price band to be Rs. 56-60 and it will be able to raise around Rs. 1,210 crore from this issue.

As there is a bank holiday on 10th May, no bidding will happen on this day and the issue will close on Thursday, 11th May.

Here are some of the salient features of this IPO:

Price Band – HUDCO has fixed its price band to be Rs. 56-60 a share and there is a discount of Rs. 2 a share for the retail investors.

Size & Objective of the Issue – This issue is an Offer for Sale (OFS) by the government of India and thus no fresh issue of shares is involved. The government is selling its 10.2% stake in this IPO, post which it will have 89.8% stake.

Retail Allocation – 35% of the issue size is reserved for the retail individual investors (RIIs) i.e.  approximately 7 crore shares out of 20.02 crore shares. 15% of the issue size is reserved for the non-institutional investors and the remaining 50% shares will be allocated to the qualified institutional buyers (QIBs). Employees will also have the option to apply for its shares during this offer period and around 38.69 lakh shares have been separately reserved for them.

Rs. 2 Discount for Retail Investors & Employees – The government has decided to offer a discount of Rs. 2 per share for the retail investors, as well as the employees of HUDCO in this IPO.

Bid Lot Size & Minimum Investment – Investors in this offer need to bid for a minimum of 200 shares and in multiples of 200 shares thereafter. So, you as a retail investor would be required to invest a minimum of Rs. 11,600 at the upper end of the price band and Rs. 10,800 at the lower end of the price band.

Maximum Investment for Retail Investors – Individual investors investing up to Rs. 2 lakh are categorised as retail individual investors (RIIs). As a retail investor, you can apply for a maximum of 17 lots of 200 shares @ Rs. 58 i.e. a maximum investment of Rs. 1,97,200. So, investors opting for the “Cut-Off Price” option should apply for a maximum of 17 lots of 200 shares @ Rs. 58 per share.

Listing – The shares of the company will get listed on both the stock exchanges i.e. National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) within 6 working days after the issue gets closed on 11th May. May 19th is the tentative date for its listing.

Here are some of the important dates for this IPO:

Issue Opens – On May 8, 2017

Issue Closes – On May 11, 2017

Finalisation of Basis of Allotment – On or about May 17, 2017

Initiation of Refunds – On or about May 18, 2017

Credit of equity shares to investors’ demat accounts – On or about May 18, 2017

Commencement of Trading on the NSE/BSE – On or about May 19, 2017

Financials of HUDCO

picture-1

Here is the link to the HUDCO IPO Review

Previous post:

Next post: