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IPO Note: Housing & Urban Development Corporation Ltd (HUDCO) -
IPO Note: Housing & Urban Development Corporation Ltd (HUDCO)
HDFC Sec | Published: 08 May, 2017  | Source :

Issue Snapshot:

  • Issue Open: May 08 – May 11 2017
  • Price Band: Rs. 56 – 60 (discount of Rs 2 for Retail Investors and employees)
  • Issue Size: 204,058,747 Equity Shares
  • Face Value: Rs 10
  • Book value: Rs 44.50 (Dec 31, 2016)
  • Bid size: 200 equity shares and in multiples thereof

Objects of Issue:

The objects of the Offer are: (i) to carry out the disinvestment of 200,190,000 Equity Shares by the Selling Shareholder constituting 10% of Company’s pre-Offer paid up Equity Share capital and (ii) to achieve the benefits of listing the Equity Shares on the Stock Exchanges. HUDCO will not receive any proceeds from the Offer and all proceeds shall go to the Selling Shareholder.

Background & Operations:

Housing & Urban Development Corporation Ltd (HUDCO) is a wholly-owned Government company with more than 46 years’ experience in providing loans for housing and urban infrastructure projects in India. It has been conferred the status of Miniratna (Category-I Public Sector Enterprise) by the GoI. As at December 31, 2016, its total sanctioned loans since inception was Rs. 1,631,372.4 million, Rs. 602,288.7 million of which, or 36.92%, were Housing Finance (as defined below) loans and Rs. 1,029,0873.7 million of which, or 63.08%, were Urban Infrastructure Finance (as defined below) loans. As at December 31, 2016, its total outstanding Loan Portfolio was Rs. 363,858.2 million, Rs. 112,281.4 million of which, or 30.86%, were Housing Finance loans and Rs. 251,576.8 million of which, or 69.14%, were Urban Infrastructure Finance loans and project-linked bonds.

HUDCO classifies its housing finance loans into social housing, residential real estate and retail finance, which are branded as HUDCO Niwas (collectively, “Housing Finance”). Under social housing, the ultimate beneficiaries of the loans it makes are borrowers belonging to the economically weaker sections (“EWS”) of the society, which is defined as families with household income of Rs. 300,000 per annum or less, and borrowers belonging to the lower income group (“LIG”), which is defined as families with household income from Rs. 300,001 per annum to Rs. 600,000 per annum. Under residential real estate, the ultimate beneficiaries of the loans it makes are public and private sector borrowers for housing and commercial real estate projects, including land acquisition. It finances social housing and residential real estate through primarily lending to State Governments and their agencies, which, in turn, extends the finance to or utilise the finance for the ultimate individual beneficiaries.

Under HUDCO Niwas, it provides financing to individuals directly and bulk loans to State Governments, their agencies and public sector undertakings (“PSUs”) for on-lending to their employees and to other HFCs for on-lending to the general public. With respect to urban infrastructure finance, it make loans for projects relating to: water supply; roads and transport; power; emerging sectors, which includes SEZs (special economic zones), industrial infrastructure, gas pipelines, oil terminals and telecom sector projects; commercial infrastructure and others, which includes shopping centres, market complexes, malls cummultiplexes, hotels and office buildings; social infrastructure and area development; and sewerage, drainage and solid waste management (collectively, “Urban Infrastructure Finance”).

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