Housing and Urban Development Corporation on Friday made a strong debut on the stock exchanges. The shares listed at ₹73, a 22 per cent premium over its issue price of ₹60 on the NSE. The stock gained as much as 30 per cent intraday but settled with a gain of 20 per cent, closing at ₹71.15.
According to analysts, HUDCO has healthy operating margins, high credit rating, access to diversified and lower-cost funding, pan-India presence in State government projects backed by quality leadership and management, strong business model and a great track record. The company’s IPO attracted high investor interest with subscription of 80 times.
G Chokkalingam, founder at Equinomics Research and Advisory recommends to hold the stock with a target price of ₹80.
The company’s initial public offer has been the third by a government-owned company after Mahanagar Gas (MGL) and PNB Housing Finance. Moreover, the IPO was the largest by a government-owned company in over five years.
HUDCO’s debut performance has been second-best among the three. MGL had done better on listing day with closing gains of 23.6 per cent.