The government has invited bids from merchant bankers to carry out 10 per cent stake sale in Housing and Urban Development Corporation Ltd.
The Department of Investment and Public Asset Management under the Ministry of Finance on Tuesday came out with a request for proposal (RFP).
“The government intends to disinvest 10 per cent paid-up equity share capital of HUDCO comprising of 20.01 crore shares with a face value of ₹10 each, out of its shareholding of 100 per cent, through an IPO in the domestic market,” it said.
A part of the public offering will be reserved for employees of the company.
The eligible employees and retail investors will be offered shares at a discount (to be decided later) on the issue price, it added.
The government will select and appoint up to four merchant bankers with experience in public offerings, which together will form a team and would be called Book Running Lead Managers.
Syndicate formation “The BRLMs, in consultation with the government, will form a syndicate as required under SEBI guidelines. The government will have the option of appointing additional syndicate member(s), if considered necessary,” the note said. They will be tasked with structuring the IPO, undertake due diligence activities, complete all stipulated requirements and formalities of regulatory/statutory authorities, undertake market research, among other activities.
The Cabinet Committee on Economic Affairs on June 15 had cleared HUDCO’s proposal for stake sale.
HUDCO is a techno-financial institution engaged in the financing and promotion of housing and urban infrastructure projects throughout India.
The company has operated its financing business profitably since inception, including a profit after tax of ₹783.79 crore for fiscal 2016. As on March 31, HUDCO has a net worth of ₹8,317.25 crore
Its paid-up equity capital as on March 31 is ₹2,001.90 crore.