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HUDCO IPO ANALYSIS: SOURCE SPTULSIAN

HUDCO (Housing and urban development corporation)
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Housing and Urban Development Corporation (HUDCO) is entering the primary market on Monday 8 May 2017, in the price band of Rs. 56 to Rs. 60 per share, with Rs. 2 per share discount for retail investors. Issue closes on Thursday, 11 May and it likely to list on the bourses on 19 May.
Wholly owned by the Indian Govt, HUDCO is a Miniratna (Category-I Public Sector Enterprise)
Both housing and urban infrastructure sectors in which HUDCO has presence are facing some serious tailwinds, in the form of Govt. impetus via ‘Smart Cities’ and ‘Housing for All by 2022’ projects which provide visible headroom for future growth.
To summarise, Govt. backed lender extending loans to state agencies, where risk of default is near-zero, with adequate capital backing, good quality book and very strong sector tailwinds, is being offered at a price-to-book value multiple of only 1.2 times, which is indeed a no brainer. Retail discount of Rs. 2 per share, seen after a long times, only acts as an additional sweetener!

Very attractive pricing supported by domestic housing boom make this issue a subscribe both from listing gains and long term perspective. Share also hold promise to touch the 3-digit figure over the next 12 months.
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