HUDCO is expected to benefit from the government's focus on improving urban infrastructure and push for smart cities and low-cost housing, analysts say.
The strong response was partly due to the fact that there was no issue of new shares, thus no dilution of earnings, said Arun Kejriwal, founder of Kejriwal Research & Investment Services.
The shares are expected to start trading on or around May 19.
India's IPO market has been off to a strong start this year after clocking its best year in six in 2016 with about $4 billion worth of initial share sales.
A $290 million IPO of supermarket operator Avenue Supermarts Ltd in March had been subscribed 106 times. The stock has risen 2.5 times from its IPO issue price.
The interest for HUDCO's share sale augurs well for other government company listings planned this financial year, including $1.7 billion worth of IPOs planned for five state-run general insurers.
The part sale of government stakes in state-run and private firms is critical to meet the fiscal deficit target of 3.2 per cent of gross domestic product in the year to March 2018. The government aims to raise Rs 72,500 crore through stake sales during the year.
IDBI Capital Markets, ICICI Securities, Nomura and SBI Capital Markets are the banks managing the HUDCO IPO.
($1 = Rs 64.4080)