Shares of Housing and Urban Development Corporation Ltd. (HUDCO) declined as much as 9% on Wednesday, October 18, morning after the government announced it would sell up to 7% stake in the housing finance company through an Offer for Sale (OFS).

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The government plans on selling up to 3.5% equity through the OFS with a greenshoe option to sell another 3.5% stake. Based on the base offer and oversubscription option, the government plans on selling up to 14.01 crore shares.

Non-retail investors can bid in the OFS today, i.e. Wednesday, while the offer for retail investors will open on Thursday, October 19.

CNBC-TV18 had reported on September 18 that excess government stake in state-run entities can mobilise as much as Rs 1.9 lakh crore.

Recently, the government had pared over a 4% stake in SJVN Ltd. after the stock had risen over 100% in 2023, a first in the company's history as a listed enterprise.

In an interaction with CNBC-TV18, Elara Capital's Shweta Daptardar said that the valuations of HUDCO are attractive at current levels.

Shares of HUDCO have risen 60% so far in 2023. The government, based on the latest shareholding pattern, holds 81.8% of the company. In case the entire 7% stake is sold in the OFS, the government's stake will fall to 74.8%, below the mandated 75% mark.

HUDCO's shares are down 8.6% at Rs 82.2 currently. This is the biggest single-day drop for the stock since December 2022.

(Edited by : Amrita)

First Published:Oct 18, 2023 9:35 AM IST