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HUDCO IPO: HEM Securities recommend to 'Subscribe' - IndiaNotes.com
HUDCO IPO: HEM Securities recommend to 'Subscribe'
Hem Securities | Published: 08 May, 2017  | Source : IndiaNotes.com

Co is a wholly –owned Govt co providing loans for housing & urban infrastructure projects in India. As at Dec 31,2016,co’s total sanctioned loans since inception was Rs 1,631,372.4 mil-lion, Rs 602,288.7 million of which 36.92 % were housing fi-nance loans & Rs 1,029,083.7 million of which or 63.08 % were Urban infrastructure finance loans. As at Dec 31,2016 co’s total outstanding Loan portfolio was Rs 363,858.2 million. Rs 112,281.4 million of which , or 30.86 % were Housing Finance loans & Rs 251,576.8 million of which , or 69.14% were Urban Infrastructure Finance loans & project –linked bonds. Co classi-fy its housing finance loans into social housing ,residential real estate & retail finance ,which is branded as HUDCO Niwas (col-lectively Housing Finance”).With respect to urban infrastruc-ture finance, co make loans for projects relating to :water sup-ply, roads & transport, which includes railways & ports ;power; emerging sectors which includes SEZs (special economic zones),industrial infrastructure, gas pipelines, oil terminals & telecom sector projects; commercial infrastructure & others, which includes shopping centres, market complexes, malls-cum-multiplexes ,hotels & office buildings; social infrastructure & area development & sewerage, drainage & solid waste man-agement(collectively ,”Urban Infrastructure Finance”). The issue consists of offer for sale of 204,058,747 Equity shares.


 

Reasons to "Subscribe"

 


 

Co have been conferred the status of Miniratna (Category-I public Sector Enterprise) by the GOI. Co’s borrowers under Urban Infrastructure Finance are primarily State Governments & their agencies. Domestically, co hold a credit rating of AAA, the highest credit rating ,for long term borrowings from each of CARE,ICRA & IRRPL, which lowers co’s cost of borrowing. In addition to co’s registered & corporate office & research & training wing in New Delhi ,co have 21 regional offices & 11 development offices, giving it a presence in the capital city of each state ( except for Gujarat & Andhra Pradesh,where co have an offices in Ahmedabad & vijaywada respectively), the major city of three Union territories & in other cities in two States.

 


 

Valuation

 


At price band of Rs 56-60 ,co is bringing the issue at p/b multiple of around 1.25-1.35. Co with established track record of profitable since 1946 & strong NIM plays a key role in various Govt’s schemes to develop Indian housing & urban infrastructure. At cur-rent level,co is reasonably priced & hence we recommend "Sub-scribe" on issue.


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About Hem Securities
The Hem Securities is one of the leading broking Network in India. It provides trading platform in all the leading exchanges namely - BSE, NSE, MCX , NCDEX & MCX-SX. Their mission is to build wealth for their investors by offering them best financial services through trading & investment strategies and honoring commitment with ethical & transparent business practices.

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