HUDCO Explores Expansion in Infrastructure Projects Exposure

The Housing and Urban Development Corporation (HUDCO) is undergoing a strategic shift, increasingly positioning itself as a financier for urban infrastructure projects, expanding beyond its traditional housing segment. In a bid for diversification and growth, the share of infrastructure projects in HUDCO's loan portfolio has been on the rise, while that of housing has been declining.

Sanjay Kulshrestha, who assumed the role of CMD in October last year, emphasized the necessity of broadening the institution's scope beyond housing. HUDCO has taken steps towards this goal by applying to the Reserve Bank of India for registration as an Infrastructure Finance Company.

In the December quarter, HUDCO's consolidated net profit doubled to ₹519 crore, with revenue climbing nearly 18% to ₹2013 crore. Despite lower loan sanctions in the first nine months of the current fiscal year compared to the previous year, disbursements saw a significant increase, reaching ₹7768 crore.

HUDCO's outstanding loan book stood at ₹84,424 crore by the end of the quarter, marking a substantial rise from ₹79,290 crore the previous year. The share of housing in its loan portfolio dropped to 4.3% in the first nine months of FY24, down from 14.1% in FY23.

In absolute figures, HUDCO sanctioned loans worth ₹17,283 crore for infrastructure projects in FY24 so far, compared to ₹769 crore for housing projects. Infrastructure projects constituted 85.4% of total disbursements.

Urban infrastructure accounted for 49% of HUDCO's total loan portfolio, with the remainder allocated to housing projects. In Maharashtra alone, HUDCO has an exposure of ₹7500 crore across various infrastructure and housing projects, with an additional ₹30,000-35,000 crore worth of financing in progress.

To support its expanding operations, HUDCO has obtained board approval to nearly double its borrowing program to ₹35,000 crore. This strategic shift underscores HUDCO's commitment to evolving with the changing needs of urban development and infrastructure financing in India.

HBL