Cabinet approves 10% disinvestment in HUDCO

The Dollar Business Bureau

The Cabinet Committee on Economic Affairs (CCEA) has given nod for the disinvestment of paid up equity in Housing and Urban Development Corporation Ltd (HUDCO) on Wednesday.

The CCEA chaired by the Prime Minister Narendra Modi approved for the sale of 10% stake in the state-owned firm through Initial Public Offering (IPO) as per the rules and regulations of Securities and Exchange Board of India (SEBI).

Currently, the Government of India owns 100% shareholding in the HUDCO. The paid up equity capital of the company is Rs.2,001.90 crore and its net worth is around Rs 7,800 crore.

Under the Ministry of Housing and Urban Poverty Alleviation, the HUDCO was formed on 25th April 1970 as government enterprise. It provides finance for building houses and urban development projects across the country.

The Union government has set a target to disinvest Rs.56,500 crore for FY 2016-17. Out of this, Rs.36,000 crore would come from the minority stake sale and another Rs.20,500 crore would come from strategic stake sale in public sector units (PSUs) including Coal India Ltd, National Fertilizers Ltd, Bharat Electronics Ltd and others.

The government has raised approximately Rs.25,312 crore by selling stakes in the PSUs during FY 2015-16, which also include NMDC, MOIL, Nalco, Bharat Fertilisers and MMTC. This is less than 50% of the target set by the government at Rs.69,500 crore for the previous fiscal year.