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26 October, 2020 10:37 IST
HUDCO IPO: Should you subscribe?
Source: IRIS | 08 May, 2017, 10.49AM
Rating: NAN / 5 stars.
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Housing and Urban Development Corporation (HUDCO) is a wholly owned Government company with focus on Housing and Urban Infrastructure Finance in India. The Government is divesting its 10% stake in the company as part of its disinvestment programs.

Angel Broking has recommended 'Subscribe' to IPO of HUDCO. Commenting on the investment rationale, the stock broker said, ''HUDCO has a unique blend of business with focus on financing both housing and urban infrastructure, which has vast untapped opportunity in India. Focus on Govt. sponsored projects and ability to raise funds at a competitive price provides earnings visibility for many years. At the issue price band of INR 56-60, the stock is offered at 1.25x-1.35x its 9MFY2017 BV, which we believe is reasonably priced, and hence, recommend Subscribe to the issue.''

GEPL Capital, said, ''HUDCO stands to gain from operating leverage and also rise in the business. At a P/E of 15.4x we believe that HUDCO at discount as compared to its domestic peers. We assign a Subscribe rating to the IPO.

Choice Equity Broking, said, ''As HUDCO generates 70% business from urban infrastructure finance and 30% from housing finance, there s no close peer to company. Given the strong fundamentals of company and favorable industry scenario, valuation looks attractive as at the higher price band of Rs60 per share, HUDCO's share is available at a P/BV multiple of 1.2(x). Average P/BV multiple of housing and infrastructure finance companies such as DHFL, LIC Housing Finance, L&T Finance Holdings, PFC and REC is currently stands at 2.1(x). We recommend Subscribe to the issue.''

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