Vital information about HUDCO IPO
If you are one of the investors who have been waiting on the sidelines for the right opportunity, let us tell you the time has come. With all sections of the investing community eagerly waiting for the HUDCO IPO, we recommend you to participate in the IPO. Do not miss the opportunity.
The listing gains in an IPO are always the function of the hype and popularity of the IPO. HUDCO is one of the biggest lenders in the housing and urban infrastructure space and has advances over 36,000 crore. It is fully owned government entity and 90% of its advances are made to state government agencies.
The points mentioned above and written below, make HUDCO a must have in the portfolio of every investor. Even if you don’t want to invest in the company for the long term, still we recommend you to participate just for the listing gains.
- Plays a key role in various government schemes to develop the Indian housing and urban infrastructure sectors.
- A very high proportion of loan portfolio is to state governments and their agencies.
- Gross NPAs for loans to state governments and their agencies were negligible at 0.75% as against the total gross NPAs of 6.80% of loan portfolio.
- Advantage of lending to state governments and their agencies is that for the purposes of calculating capital to risk weighted assets ratio (CRAR), the housing finance company (HFC) directions on capital adequacy accord a zero risk-weight to loans guaranteed by state government. CRAR was 63.70% end December 31 2016 compared with the regulatory requirement of 12%.
- Highest credit ratings, access to diversified and lower-cost funding and ability to significantly increase borrowings in compliance with the HFC directions.
- P/E on annualized nine-month FY2017 EPS of Rs 3.31 per share works out to 16.9 at lower price band and 18.2 times at higher price band.
- The book value (BV) is Rs 44.8 as of December 2016. The adjusted BV, net of net NPAs, is Rs 42.05 per share. P/BV works out to 1.34 times and P/Adj BV 1.43 times at the upper price band
- There are no comparable listed companies in India in the same business. However, among the comparable PSU lenders in the infrastructure space, Rural Electrification Corporation trades at P/BV of 1.3 times and Power Finance Corporation at P/BV of 1 times. All BVs end December 2016.
- At the price band of Rs 60 per share, Hudco is offered at a P/E of 18.2 times (annualised nine- month FY2017 EPS). Among the comparable PSU lenders, REC trades at P/E of 6.1 times and PFC at 5.7 times (annualised nine-month FY2017 EPS).
For Full IPO Details & allotment status Visit http://www.mysharebazaar.com/ipo-2017/hudco-ipo-details-dates-size-allotment-status-subscription-basis-listing-form-review/