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HUDCO IPO: Investors with long term horizon may consider for investment - IndiaNotes.com
HUDCO IPO: Investors with long term horizon may consider for investment
SMC | Published: 08 May, 2017  | Source : IndiaNotes.com


Issue Highlights

  • Net Offer to the Public : 204,058,747
  • Issue Size (Rs. Cr.)    : 1142-1224
  • Price Band (Rs.)        : 56-60
  • Offer Date              : 8-May-17
  • Close Date              : 11-May-17
  • Face Value              : 10
  • Lot Size                : 200


Industry Outlook:


India had an estimated population of 1.3 billion in Fiscal 2015 and a gross domestic product (“GDP”) at current prices of approximately US$2.1 trillion in Fiscal 2015. The housing finance sector will register a growth of around 18% to 20% in Fiscal 2017, compared with the 5-year CAGR of 18% in Fiscal 2011 to Fiscal 2016. The growth is likely to be supported by some pick-up in primary sales, new launches and a healthy growth in the Affordable Housing segment. ICRA expects banks to grow their home loan books at around 16% to 19% and HFCs at a slightly higher pace of around 17% to 21% leading to an overall growth of 18% to 20% in Fiscal 2017. The long-term growth outlook for the sector remains positive given the Government’s focus on “Housing for All” by 2022, and the favourable regulatory environment. (Source: ICRA–Indian Mortgage Finance Market Update for Q1FY17).


Valuation:


At upper price band of Rs.60, EPS and P/E of FY2017 are Rs. 3.31and 18.13 multiple respectively and at a lower price band of Rs. 56, P/E multiple is 16.92; at upper price band of Rs.60 , book value and P/B of FY2017 are Rs.45.63 and 1.31 multiple respectively and at a lower price band of Rs. 56, P/B multiple is 1.23. No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.


Outlook:


The Company is set to play a significant role in PMAY under Housing for All (HFA) by 2022 and thus the outlook of the company looks bright. Moreover, it enjoys AAA rating for its debt plans from rating agencies like CARE and ICRA. With Pan India presence, company is set to explore growth potentials. Investors with long term horizon may consider for investment.


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About SMC
SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.