Govt to sell 8% stake in Hudco via offer for sale; may get Rs 720 crore

Sale would reduce govt's holding in the firm to 81.81% if it exercises greenshoe option, and offloads entire 8% in the PSU

The government will sell eight per cent stake in Housing and Urban Development Corporation (HUDCO) through an offer for sale (OFS) on Tuesday, and is expected to mop up about Rs 721 crore from the transaction.

The government’s offer to sell its 110 million shares or 5.5 per cent stake in the public sector enterprise would open for non-retail investors on Tuesday, and for retail investors on Wednesday, with an option to additional sell 2.5 per cent shareholding. The floor price for the sale has been set at Rs 45 a share, which is at a 5 per cent discount to the stock’s closing price on Monday.

The sale would reduce the government’s shareholding in the company to 81.81 per cent if it exercises the greenshoe option, and offloads the entire 8 per cent in the public sector undertaking (PSU).

Institutional or non-retail investors will get an option to carry forward their unallocated bids to the next day for allocation from the unsubscribed portion for retail investors. The issue will open for retail investors on July 28.

This is the second time the government is offloading its stake in a PSU through an OFS in the current financial year--the first one being NMDC--as it looks to meet its Rs 1.75 trillion divestment target. So far, the government has mopped up Rs 7,646 crore through OFS of NMDC and selling stake in Axis Bank in the current fiscal.