The non-retail portion of the offer for sale was subscribed 2.1 times, with the government getting bids for 13.3 crore shares, against 6.3 crore shares on offer.
Following this response, the government proposed to sell an additional 7 crore shares or a 3.5% stake in the company.
The steep discount offered by the government in the OFS triggered a strong response from institutional investors.
The government set the floor price for the OFS at Rs 79 apiece, an over 12% discount to Tuesday’s closing price. This prompted investors to dump the stock in the open market and subscribe to the OFS.
On Wednesday, shares of HUDCO ended nearly 11% down on the National Stock Exchange at Rs 80.25.
The OFS opened for retail investors on Thursday, and the government has set aside 70,06,650 shares for them. The question is whether it’s an offer worth subscribing to for retail investors.
HUDCO has been a significant partner in financing infrastructure development projects, especially those focused on providing housing for economically disadvantaged sections.
Let’s now take a look at the performance of the stock. So far in 2023, HUDCO has given over 54% returns to investors, thereby turning out to be one of the best-performing stocks in the public sector space.
“Given its historically average growth and the recent surge in the stock price over the past year, the floor price appears on the expensive side. Therefore, investors can look to avoid the OFS,” said Veer Trivedi, research analyst, SAMCO Securities.
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