Published on 6/05/2017 10:41:35 AM | Source: GEPLCapital Ltd

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Company Background

Housing and Urban Development Corporation Ltd (HUDCO). Incorporated in 1970, Housing and Urban Development Corporation Ltd (HUDCO) is a wholly-owned Government company with more than 46 years experience in providing loans for housing and urban infrastructure projects in India. They provides long term finance for construction of houses and to undertake housing and urban infrastructure development programs. Apart from the financing operations, HUDCO offers consultancy services, promotes research and studies and help propagate use of local building materials, costeffective and innovative construction technologies.

HUDCO offers loans for housing projects, such as urban and rural housing, co-operative housing, community toilets, slum up gradation, staff housing, repairs and renewals, private sector projects, land acquisition, and housing programs. They also offers take out finance for housing and infrastructure projects to state government, public agencies, and private corporate sector agencies.

 

Key role in various Government’s schemes to develop the Indian housing and urban infrastructure sectors and a very high proportion of the company’s Loan Portfolio is to State Governments and their agencies 

 

HUDCO plays a key role in various Governments’ schemes to develop the Indian housing and urban infrastructure sectors, such as DAY-NULM, JNNURM and PMAY-HFA (Urban), through the appraisal and monitoring of projects. Through its role of appraising projects under various Government schemes, it has built a strong relationship with State Governments and their agencies. This gives it a better chance of providing loans to those entities, whether for projects under those schemes or otherwise. As at September 30, 2016, `324,390.6 million, or 89.83% of its total Loan Portfolio, were to State Governments and their agencies.

 

Highest credit ratings, access to diversified and lower-cost funding and ability to significantly increase the company’s borrowings in compliance with the HFC Directions.

Domestically, the company 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, it had total borrowings of `246,743.4 million (standalone), representing 2.85 times their NOF of `86,537.7 million (standalone). The HFC Directions currently permit HFCs to borrow up to 16 times their NOF. The company’s current overall borrowing limit approved by its shareholder is `400,000.0 million. This borrowing limit may be increased if it is approved by its shareholders. Therefore, they have the ability to significantly increase the amount of their borrowings and thereby increase the amount of funds they have to lend for Housing Finance loans and Urban Infrastructure Finance loans. 

 

Established track record, profitable since inception and a strong financial position

 The company has been profitable since inception over 46 years ago, including a profit after tax of `3, 481.9 million (consolidated), `7,742.8 million (consolidated), `7,683.2 million and `7,339.7 million for the six months ended September 30, 2016 and Fiscals 2016, 2015 and 2014, respectively. As at September 30, 2016, they had a 114 net worth of `87,241.9 million (standalone). Their 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%. Their sustained performance and profitability enabled them to earn the Miniratna (Category-I Public Sector Enterprise) status, which was conferred to them in Fiscal 2005. 

 

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