Hudco gets Sebi approval to float IPO; govt to divest 10% stake

A discount of up to 5% on the issue price would be given to retail investors and Hudco employees

State-run Housing and Urban Development Corporation (Hudco) has received the Securities and Exchange Board of India's (Sebi's) approval to raise funds through an initial share sale as part of the government's disinvestment drive.

Hudco had filed draft papers with Sebi in January and got the markets watchdog's "observation" on March 10, which is necessary for any company to launch a public offer.

The initial public offer (IPO) will comprise sale of 200,190,000 equity shares -- amounting to a 10 per cent stake -- by the central government through an offer for sale route, as per the Draft Red Herring Prospectus.

 

A discount of up to five per cent on the issue price would be given to retail investors and Hudco employees.

The paid up capital of Hudco is Rs 2,001.90 crore as on March 2016. The government holds 100 per cent 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 financial year.

The government expects to raise Rs 56,500 crore through minority stake sale and strategic sale in public sector units (PSUs) this financial year. Of this, Rs 36,000 crore is to come from minority stake sale in PSUs and another Rs 20,500 crore from strategic stake sale.