HUDCO shares fall most in nearly 10 months as government cuts stake

HUDCO OFS: Shares of Housing & Urban Development Corporation (HUDCO) fell as much as 9.50 per cent posting their biggest single-day fall since December 23, 2022 as government cuts stake in the company via offer for sale (OFS).

The government is selling 14 crore shares of the company via OFS route representing 7 per cent of the total paid up equity share capital. The floor price has been fixed at Rs 79 which is 11.23 per cent lower than its previous close of Rs 89 on the BSE.

The share sales via OFS for 7 crore shares or 3.5 per cent stake will open for institutional investors on Wednesday while retail investors can place bids for remaining 7 crore HUDCO shares on Thursday, as per the stock exchange filing.

At Rs 79 apiece, the 7 per cent share sale in HUDCO would fetch about Rs 1,000 crore to the government.

"Offer for Sale in HUDCO opens tomorrow for non-retail investors. Retail investors can bid on Thursday. Government will divest 7 per cent equity, including a Green Shoe Option of 3.5 per cent," Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said in a post on social media platform X, formerly Twitter.

With the share sale of HUDCO, government will be inching closer towards achieving its divestment target of Rs 51,000 crore which was announced by Finance Minister Nirmala Sitharaman on February 1 when she presented the Budget.

The government had projected divestment target of Rs 65,000 crore in the previous financial year which was slashed to Rs 50,000 crore. However, the government managed to garner Rs 35,294 crore, which was approximately 30 per cent of the renewed estimate.

The OFS was subscribed 61 per cent by 11:50 am, data from NSE showed.

As of 11:53 am, HUDCO shares traded 8.86 per cent lower at Rs 81.95, underperforming the BSE 500 index which was down 0.47 per cent.