Housing and Urban Development Corporation Ltd IPO Message Board (Page 112)

Septa?

BASED ON COMPARE WITH REC OR NBCC OR PNBHF HUDCO FAIR VALUE RS 35

please also ask septa sir for fair value given by them as 33

Dear CA saheb,

I wonder what has changed in the past 4 days for you to increase the fair value from 20 to 35 ??


I refer your earlier post ..

gupa Mar 29, 2017 10:22:33 AM IST Reply
Housing and Urban Development Corporation Ltd IPO

IF WE COMPARE REC WITH HUDCO THEN FAIR VALUE OF HUDCO ONLY RS 20

S Chand & Company IPO – Schedule (Tentative)

21st April – Anchor Investors
24th April – Offer Opens
26th April – Offer Closes
01st May – Market Holiday for Maharashtra Day
02nd May – Finalisation of Basis of Allotment
03rd May – Unblocking of ASBA
04th May – Credit to Demat Accounts
05th May – Listing on NSE & BSE


Issue Information: (Tentative)

Issue Opens on: 24 April 2017
Issue Closes on: 26 April 2017
Issue Type: Book Built Issue IPO
Issue Size: 1,11,95,650 Equity Shares
Face Value: Rs 5 per Equity Share
Issue Price: Rs.575 – Rs.580 per Equity Share
Market Lot: 25 shares
Listing At: NSE, BSE

Equity Shares outstanding prior to the Issue = 2,98,44,496 Equity Shares
Fresh Issue of 51,72,414 Equity Shares @580/- aggregating up to Rs.3,000 million
Offer for Sale of 60,23,236 Equity Shares @580/- aggregating up to Rs. 3,500 million
Total Issue of 1,11,95,650 Equity Shares @580/- aggregating up to Rs.6,500 million
Equity Shares outstanding after the Issue = 3,50,16,910 Equity Shares

Category-wise Break up:
Anchor – 33,58,695 Shares = 194.80Crs.
Net QIB – 22,39,130 Shares = 129.87Crs
NII – 16,79,347 Shares = 97.40Crs
RII – 39,18,478 Shares = 227.27Crs. (Lot size: 25 = 156,739 Forms)

Total Issue – 1,11,95,650 Equity Shares = 649.35Crs.

Subscription required for 1X
RII = 156,739 Forms
NII = 97.40 Crs

Interest cost @7%p.a. for 7days = 7.786paise for 1X
 
S Chand & Company IPO:

Promoter of the Company: Mr. Dinesh Kumar Jhunjhnuwala & Mr. Himanshu Gupta

Financial Information (Basis of Valuation):

EPS for FY13-14 >>> Rs.16.60 (Page #114 of DRHP)
EPS for FY14-15 >>> Rs.10.52 (Page #114 of DRHP)
EPS for FY15-16 >>> Rs.17.09 (Page #114 of DRHP)
EPS for Q116-17 >>> Rs.(9.52) (not annualised)


RoNW for FY13-14 >>> 11.86% (Page #115 of DRHP)
RoNW for FY14-15 >>> 7.00% (Page #115 of DRHP)
RoNW for FY15-16 >>> 7.82% (Page #115 of DRHP)
RoNW for Q116-17 >>> (5.01)% (not annualised)

NAV as on June 30, 2016 was Rs.190.02 (Page #115 of DRHP)

Listed Industry Peer >>> Navneet Education Limited (Page #116 of DRHP)

PRICE BAND 575-580
EPS OF FIRST Q IS -9.75
LOSS MAKING COMPANY
WHO CAN SAY APPLY

Anirudh these company profit is very seasonal however last quarter and first quarter is the best given school opening however result from first quarter is not that rosy

After seeing the Comments of experts like EE, Septaji, Anandk, Shareview etc, I feel HUDCO issue is unlikely to give any listing gain. HUDCO cannot be compared with listed retail Housing finance Companies. Moreover it is a PSU company where lack of efficiency of management to be noted. . . Since IPO market is booming & Housing finance is the flavor of the market, the management will try to extract the maximum issue price.

you bought a smile to my face. your "expert" tag!

Why you feel that HUDCO is unlikely to give any listing gain ?

What you are trying to say is that fundamentally company is not good because of lack of efficiency of management.OK I agree to some extent because of marginally somewhat high npa but it doesn''t mean that it will not give any listing gain.Such type of things are already discounted while pricing and we can''t say that nothing is left for us on the table.I think the listing of ''CL Educate'' has put much impact on you and that''s why you are comparing only management''s efficiency and not the pricing factor.Fundamental analysis and Technical analysis both are different things.Premium of 30 on 50 may be too high but at least 10-12 can be expected as listing gain.

178. Anandk Apr 2, 2017 11:22:35 PM IST I Like It. 2 | Report Abuse Reply
As per my analysis on this company which is based upon Discounted Dividend Model, I got a fair value in the range of 33-38.

AS I SAID EARLIER FAIRVAULE THAT TO IN RANGE IS NOT POSSIBLE IF USE THE FORMULA RIGHT U WILL EITHER GET 33 OR 38 PLUS RANGE U GETTING IS 15%

BTW ANANDK IT IS NOT THAT HARD TO DO DDM YOU JUST DO IT ONCE IN YOUR EXCEL SHEET AND CHANGE NUMBERS DEPENDING ON YOUR ASSUMPTION AND COMPANY DATA

PLS FORWARD YOUR ASSUMPTION I WILL WORK IT OUT FOR YOU.

I THINK U HAVE JUST PICKED A NUMBER FROM AIR AND PLACED IN THE FORUM IF YOU CANNOT EXPLAN HOW YOU GOT

Still no response. Atleast send me your file for study.

Great job mate ur excel sheet on DDM is prefect very very well done i also like the way you have moved from MIS norm for indicate fair price to range which i actually like maybe i should also in corporate. Looking at ur spreadsheet skill i also firmly believe you have a very good financial understanding of data and how to present it well done.
This ANandk spread sheet on DDM great job mate
GENERAL INFO                                                                                    
                                                                                    
Name            Housing & Urban Development Corporation                                                                        
Last Financial Period (LFY)            31/03/16                                                                        
Last Interim Period            NM                                                                        
Currency            INR                                                                        
Denominations                              in millions                                                      
                                                                                    
PROFIT AND LOSS STATEMENT                                                                                    
                                                                                    
            Actuals                  Projections                                                      
            2014A      2015A      2016A      2017E      2018E      2019E      2020E      2021E                              
Turnover            30028.8      34278.5      33022.5                                                            
% growth            --      14.2%       (3.7%)      18.0%      18.0%      18.0%      15.0%      11.9%                              
EBITDA                              0.0      0.0      0.0      0.0      0.0                              
% growth            --      --      --      --      --      --      --      --                              
% margin            0.0%       0.0%       0.0%       0.0%       0.0%       0.0%       0.0%       0.0%                               
D&A                                                                                    
as a % of revenue            0.0%       0.0%       0.0%       0.0%       0.0%       0.0%       0.0%       0.0%                               
EBIT                                                                                     
% growth            --      --      --      --      --      --      --      --                              
% margin            0.0%       0.0%       0.0%       0.0%       0.0%       0.0%       0.0%       0.0%                               
Interest Expense            17016.5      17753.8      19074.6                                                            
EBT            11251.0      11698.9      10717.0                                                            
% margin            37.5%       34.1%       32.5%       32.5%       32.5%       32.5%       32.5%       32.5%                               
Tax Expense            3708.4      4015.7      3025.8                                                            
PAT            7542.6      7683.2      7691.2      7998.8      8318.8      8651.6      8997.6      9357.5            Terminal Value                  
% margin            25.1%       22.4%       23.3%       23.3%       23.3%       23.3%       23.3%       23.3%                               
Earnings per share (EPS)            3.8      3.8      3.8      4.0      4.2      4.3      4.5      4.7                  102.3            
% growth            --      1.9%       0.1%       4.0%       4.0%       4.0%       4.0%       4.0%                               
Dividends per share            0.50      0.50      0.5      1.2      1.2      1.3      1.6      1.9            40.6      48.7            
% growth            --      0%       0%       140%       4%       4%       20%       20%                               
Payout Ratio            13%      13%      13%      30%      30%      30%      35%      40%                  48%            
Cost of Equity                              8.3%      8.3%      8.3%      8.3%      8.3%                              
Cumalative Cost of Equity                              108.3%      117%      127%      138%      149%            149%      149%            
                                                                                    
PV                              1.11      1.06      1.02      1.13      1.24            27.20      32.64            
                                                                                    
                                                                                    
Fair value                                                                  33      38            
                                                                                    
                                                                                    
                                                                                    
                                                                                    
Dividend Discount Model Working                                                                                    
                                                                                    
Expected Growth Rate FY2017            6.7%                                                                        
Cost of Equity in Stable phase            6.7%                                                                        
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    
                                                                                    

As i said earlier i am against DDM method for calculating fair value as it does not take the really picture in your data u have assumed growth at 18% for first few years then move to 11.9% also u have assumed dividend payout will also increase from present 30% to 48% even with such generous growth rate and payout rate you only get a range 33 -38 bcoz in DDM no value is put on money that is not distributed to share holders in this case 70% in first few years then 52%

Just imaging if you had given growth 5% and not increased the dividend payout u would have got a worse range then 33-38 .

The DDM is built on the flawed assumption that the only value of a stock is the return on investment it provides through dividends. money which is not given a dividend does not get any value which IMO does not give justice



Anyway i like a small variation that BV + DDM fair value

which 45 + 33 = Rs78

Opens Time...

Dear All,
Some of my friends who have their demat account in CDSL has got the email/SMS regarding their IPO application, share allotment or not etc. But i have demat a/c with NSDL and not get any email/SMS regarding IPO application put or not, share allotment. I want to know is their any option so that i can received the same email/SMS like as CDSL.

-also the volume growth in HFCs, will at last benefit will go to HUDCO. by subsidies form gov.to it

Don''t miss PMAY!!HUDCO will have the assured benefits in this scheme by gov.of India till 2022 and may be after

Dear Septa - thanks for your suggestions on Stocks as well as IPO. Do you have any thoughts for this week on any stock. Your suggestions on South indian bank, fortis helped me to gain profits :) appreciate your suggestions..

Kostak has open?

Kostak has open?

Dear Anandk (m=40019),

As per your analysis ... based upon Discounted Dividend Model (DDM / FCFE) ... what is the fair value of:

1) Bharat Financial Inclusion Limited
2) Equitas Holdings Limited
3) Ujjivan Financial Services Limited

Sir.. It a 3-stage DDM. You are vouching FCFE and DDM is based on the principles of FCFE only.

I didn''t say that you''re confusing me rather I said that you are confusing DDM with the basic one instead of 3-stage.

Did any one use Bank of india online to submit multiple ipo applications of family members. It is not asking for applicant name - takes only demat and pan no. Will it be ok to submit multiple applications from same bank of india account.
Whereas online sbi takes applicant name also so i know its getting submitted against correct person name

Dear MANJITSINGH

I AM NOT POSTING GMP ONLY FOR YOU THESE GMP- ARE BASED ON JAIPUR GREY MARKETS ACTIVITY AND MY POST FOR WHOLE ARENA OF THIS SITE

AND I ALSO DON,T CARE ABOUT YOUR RUBBISH STATEMENTS.
I WILL CONTINUE TO POST GMP- AS PER JAIPUR GREY ACTIVITY

LOVE YOU
YOUR
JAIPUR TIGET😘😘😘

HUDCO’s DIVIDEND POLICY (Page No. 169 of DRHP)

Very Important Changes w.e.f. FY 2016

Subject to the provisions of the Articles of Association and the Companies Act, the declaration and payment of dividends is recommended by the Board and approved by the Shareholders, at their discretion. The DIPAM (F. No. 5/2/2016-Policy), by an Office Memorandum dated May 27, 2016, issued “Guidelines on Capital Restructuring of Central Public Sector Enterprises” (“CPSE Capital Restructuring Guidelines”).

In accordance with CPSE Capital Restructuring Guidelines, with effect from Fiscal Year 2016, our Company is required to pay a minimal annual dividend of 30% of its PAT or 5% of its net worth, whichever is higher, unless an exemption is provided in accordance with the CPSE Capital Restructuring Guidelines.

Hi Ee,
Thanks for the response.
The notification was issued in May 2016 and only due to this HUDCO had to write to MoHUPA on 16th Sept 2016 for exemption from this notf. My take is that with a highly stressed balance sheet and difficulty in raising funds at competitive rates, the ability to raise dividend will be very tough for HUDCO.
I am of the firm opinion that with no growth in its top and bottom line for last 5 and a half year and increasing NPA, HUDCO is going to be a big disappointment for the bulls.

Dear jonam (m=30407),

I am unable to see why do you think that "HUDCO is going to be a big disappointment for the bulls."

Highlights:
1)      Highest Capital Adequacy Ratio in the industry
2)      Highest Tier 1 CRAR in the Industry
3)      Highest Credit Rating from all Credit Rating Agencies
4)      Lowest Debt:Equity Ratio in the Industry




HUDCO’S Capital to Risk Assets Ratio (CRAR) as at September 30, 2016 was 68.07%, all of which was Tier 1 capital, compared to the minimum required CRAR of 12.00% and a minimum Tier 1 CRAR of 6.00%.

A significant reason for their high CRAR is that the HFC Guidelines on capital adequacy accord a “zero” risk-weight to loans guaranteed by State Governments and as at September 30, 2016, 66.71% of their total Loan Portfolio, was guaranteed by State Governments.

Domestically, HUDCO holds a credit rating of AAA, the highest credit rating, for long-term borrowings from each of CARE, ICRA and IRRPL, which lowers their cost of borrowing.

As at September 30, 2016 HUDCO’s Long-term debt to equity ratio was 2.8 (lowest in the industry)

Their sustained performance and profitability enabled them to earn the Mini-Ratna (Category-I Public Sector Enterprise) status, which was conferred to them in Fiscal 2005.

Can any one please post here for the list of upcoming ipos in....

List of Upcoming IPO in 2017

Forthcoming IPOs      IPO Size      Tentative Dates
CL Educate Limited      
Rs. 240 Cr.
20-Mar-17
CDSL      
Rs. 400 Cr.
April-17
Shankara Building Products      
Rs. 600 Cr.
21-March-17
HUDCO      
Rs. 1000 Cr.
April-17
Continental Warehousing      
Rs. 400 Cr.
April-17
Prataap Snacks      
Rs. 250 Cr.
2017
NSE India IPO      
Rs. 10000 Cr.
2017
GVR Infra Projects Limited      

2017
Paranjape Schemes Limited      

2017
SSIPL Retail Limited      

2017
Matrimony.com      

2017
Sandhar Technologies Limited      

2017
Maini Precision Products Limited      

2017
KPR AGROCHEM LIMITED      

2017
New Delhi Center for Sight Limited      

2017
Nihilent Techonologies Limited      

2017
Hinduja Leyland Finance Limited      

2017
Seaways Shipping and Logistics Limited      

2017
Mas Financial Services      
Rs. 1000 Cr.
2017
SIS Limited      
Rs. 360 Cr.
2017
Vodafone India      

2017
SBI Life Insurance      

2017
Go Airlines      

2017
Aster DM Healthcare      

2017
IRB InvIT Fund      

2017
Security & Intelligence Services      
Rs. 1000 Cr.
2017
Genesis Colors      

2017
G R Infraprojects      

2017
Cent Bank Home Finance Limited (CBHFL)      

2017
VLCC Health Care      

2017
S Chand      
Rs. 700 Cr.
2017
Four Seasons Residency      


Salasar Techno Engineering      


Eris Lifesciences      


Uniparts India      


Bharat Road Network      


Tejas Networks      


Au Financiers      


GTPL Hathway      


PSP Projects      


India Grid Trust      


Ratnakar Bank      


Matrix Cellular International Services      


Nuziveedu Seeds      


The Catholic Syrian Bank      


Amar Ujala Publications      


SMC Global Securities      


Videocon D2H      


Numero Uno Clothing      


MM Auto Industries      


AGS Transact Technologies      


Shree Shubham Logistics      


ACB India      

Vodafone cancelled due to merger with IDEA.
For IPO post merger they have to again file prospectus to SEBI

Four Seasons Residency withdraws its IPO

Uniparts cancelled due to time lapse.

Ratnakar Bank & RBL both are same

Videocon D2h business sold

VLCC also doubtful

Snapdeal either merger with rival flipkart or planning to go for IPO next year. Kotak is appointed as consultant.Credit Cuisse is the special advisor.


500 cr. John distilleries ( popular brand - Johnnie Walker ) coming with IPO with exit route of 50% GAJA Capital.Axis bank is the merchant Banker.

T group IPO - Ahmedabad based building company PSP projects got SEBI nod for IPO
Price Range around 23 - 24
Registrar - Karvy
BRLM - Motilal Oswal

As per my analysis on this company which is based upon Discounted Dividend Model, I got a fair value in the range of 33-38. And If I take into the consideration the tentative offer price and GMP attached with it, It is looking quite expensive.

The reason for being expensive are as follows-
1) Both top-line and bottom-line growth is low and steady.
2) Company is not aggressive in its approach, vision and objectives are not convincing.
3) Dividend payout ratio is bad (13% for last three fiscals). The management have now decided to keep it minimum 30% going forward after an resolution, which is still not convincing given its long history of profit making enterprise.
4) The sector it caters is already very crowded and it doesn''t enjoy any competitive advantage. The share of HFC and NBFC in overall mortgage financing is 36%.
5) Return on equity is below 9% (FY2016).
6) Gross NPA stands at 9.17% even after 90% of their loan portfolio belonging to state governments and their agencies.
7) They enjoy good credit rating and they can also raise capital by issuing tax-free bonds, in-spite of that their margins are just ordinary.


Like @ Roz Mary, I also do not want to sound negative on this stock and I also believe market factor is bigger than any other factors. But I have my reservations for this stock and I will sell it either @kostak or at ongoing GMP.

P/E and P/BV are good multiples to value any company but their implication here not meaningful. Book value and share price in the long run comes closer to each other, this is the case with this company which is growing at snail''s pace. There are three phases of growth, namely, high-growth, transition and stable. It is at the mid-stage of stable phase.

As per your analysis ... based upon Discounted Dividend Model (DDM / FCFE) ... what is the fair value of:

1) Bharat Financial Inclusion Limited
2) Equitas Holdings Limited
3) Ujjivan Financial Services Limited

I only do analysis of IPO''s. Valuation methods/techniques varies from company to company.

If you still wants me to cover these companies, I''ll do it and share with you.

Dear Eagle Eye...

With reference to your reply for my comment no.158......

As I wrote, market is king and it will decide what premium should be given to a stock....

In my comment I have also mentioned that if market gives 1.8 x PBV, then it comes to 80.....But there is big ''IF''...

I am no expert, just a simple trader but when it comes to IPO, we cannot ignore the facts....I will be very happy if market gives 2 x P/BV as per your comment...

I am not negative on this stock but PSUs are very notorious in handling NPAs...History can tell you that e.g PNB and SBI. So let market decide the premium.

I think let HUDCO decide the date & price of IPO, then the listing price can be estimated. Them delaying dates itself says something......Maybe they want to time it right...

Only peer for HUDCO is HDFC....This two companies cannot be compared as HDFC manages growth and NPAs efficiently...FATHER CANNOT BE COMPARED TO HIS SON...

So any premium to this company is hypothetical...

FYI: I am just a small trader from Mumbai new to this forum to learn and have fun...No RKS as few members are assuming and u answered my name....

@Mr.Marketpundit..If you enjoy playing with my nickname then I am happy for you....But you writing it''s unfair is wrong...I am just sharing the fact..I am not giving any target or tips. Watch TV channels for that...

HUDCO IPO

GMP- 30-30.5
APP- 1200-1250

Dear Jaipur tiger go and slip .... we r happy with eagalye gmp ..... u can say 50 gmp we don''t care