Should I buy Hudco’s IPO?
Yes, you should definately buy IPO of Hudco (Housing & Urban Development Corporation).
Market participants are mistaking HUDCO as a housing finance company and comparing it with the likes of PNB Housing Finance etc. The fact is totally opposite as 89.88% of the loan book of HUDCO is to State governments and its agencies and 10.17% to private sector.
HUDCO’s total loan portfolio is 31.28% (30.34% to state govt for social housing loans, 0.40% to individuals and 0.57% to private sector companies) and 68.72% of the total loan portfolio is advanced for Urban Infrastructure like water supply projects, Roads and Transport, Power, Sewage and Drainage etc.
If we calculate PE of HUDCO- after IPO (on basis of Dmart/Shankara & Music Broadcast & its safest GMP of 27) then it will be trailing at PE of 12, which is quite cheap.
I would say go for the IPO of Hudco -> apply minimum lot of 300 at upper price of Rs. 50 (there may be retail discount to) -> Presently, GMP is 27 (this will increase overtime) -> With listing at 81.5 (there is a neat profit of Rs. 27) - Sell on the listing day itself; to rake in a profit of 8100 (before tax).
For latest trends on GMP - please visit https://kingzeusvj.blogspot.com
Some facts based on figures:
1. In 2011-12, after the gap of 7 years HUDCO’s Profit After Tax crossed Rs. 500 crore for the first time.
2. This year HUDCO crossed the loan outstanding mark of Rs. 25000 crore.
3. In 2013-14 HUDCO launched new products (i) HUDCO Nav Nagar Yojana and Rent-to-own Scheme.
4. In 2014-15 HUDCO’s long term Credit Rating upgraded to ‘AAA’.
2. This year HUDCO crossed the loan outstanding mark of Rs. 25000 crore.
3. In 2013-14 HUDCO launched new products (i) HUDCO Nav Nagar Yojana and Rent-to-own Scheme.
4. In 2014-15 HUDCO’s long term Credit Rating upgraded to ‘AAA’.
Hope, I’ve answered your question to the “T”.
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