Company Profile:
Housing and Urban Development Corporation Ltd. (HUDCO), incorporated in 1970, is a listed Miniratna public sector enterprise under the Ministry of Housing and Urban Affairs, Government of India (GoI). It is a public financial institution registered as a housing finance company (HFC) with NHB, and primarily finances social housing and UI projects. The GoI held a share of 89.81% in HUDCO, as of December 31, 2019, while the balance was held by the public.
HUDCO reported a profit after tax (PAT) of Rs. 11,800 million in FY2019 against PAT of Rs. 10,100 million in FY2018. It reported a capital adequacy ratio of 57.9% as on March 31, 2019 compared to 52.0% as on March 31, 2018.
Rating History:
HUDCO has long-term borrowing credit rating of AAA from CRISIL, ICRA and CARE. The ratings continue to derive significant strength from GoI ownership of 89.81% as of December 31, 2019 and its important role as a nodal agency for the implementation of Government policy in the high priority sectors of social housing and urban infrastructure (UI).
Capitalization Profile:
HUDCOs financial profile is characterised by comfortable capitalisation with a CRAR of over
50% and a gearing of 4.9 times (3.2 times if the GoI fully serviced bonds (GoI FSBs) are excluded) as of December 31, 2019.
Asset Quality:
The gross non-performing asset (NPA) ratio deteriorated marginally to 4.98% in 9MFY20 (FY19: 4.48%), mainly on account of two slippages, with a combined principal outstanding of Rs 8,694 million, in 3QFY20.
Liquidity position:
HUDCOs ALM profile is characterised by positive cumulative mismatches in the medium-term and long-term buckets, with enough unutilised bank lines available for plugging any mismatches in the near term. Its funding profile is favourable as approx. 63% of the borrowings on its books are in the form of tax-free bonds and GoI FSBs with a maturity profile of 10-15 years while 5% are in the form of refinance assistance from National Housing Bank (NHB) with a tenure of up to 10 years.