HUDCO shares plummet 10% following Centre's stake sale announcement
What's the story
Shares in the Housing and Urban Development Corporation Ltd. (HUDCO) fell by nearly 10% today (October 18). This comes after the Indian government revealed plans to sell up to 7% of its stake in the company via an Offer for Sale (OFS). The Centre intends to sell 3.5% equity with a greenshoe option for an additional 3.5%. If fully exercised, the government will sell up to 14.01 crore stocks, reducing its stake in HUDCO from 81.8% to 74.8%.
Details
Offer for sale details and timeline
Non-retail investors can bid in the OFS today, while retail investors can join starting tomorrow (October 19). This move follows the government's recent reduction of its stake in SJVN Ltd. by over 4% after the company's stock value more than doubled in 2023. HUDCO's shares have also seen significant growth this year, with a 60% increase.
Insights
HUDCO shares experience largest single-day drop since December 2022
Following the Centre's announcement, HUDCO's shares experienced their largest single-day drop since December 2022, falling by 8.6% to Rs. 82.2. This significant decline reflects investor concerns about the impact of the government's decision on the company's future performance and market position. However, it remains to be seen how the market will react once the Offer for Sale is completed and the government's stake is reduced.
What Next?
A look at HUDCO's stock prices
Today on the NSE, HUDCO opened at Rs. 83 per share and touched a high of Rs. 83.40. It is currently trading at Rs. 81, down 9.95% compared to yesterday. On the BSE, HUDCO opened at Rs. 83.10 per stock and reached a high of Rs. 83.40. It is currently priced at Rs. 80.99 (down by 9.93%).