Housing and Urban Development Corporation Ltd (HUDCO) is targeting a ₹2 trillion loan book while aiming to bring its non-performing assets (NPAs) down to zero by the end of the current fiscal, according to chairman and managing director Sanjay Kulshrestha.
Speaking to Mint, Kulshrestha said the lender's remaining stressed assets are under resolution procedure and the company expects early resolution under the Insolvency and Bankruptcy Code.
"We are well on track to bring down NPA to zero. We should achieve it within this fiscal," he said.
The gross NPA of the Delhi-based housing and infrastructure financier currently stands at ₹1,668.86 crore, while net NPA is at ₹82.43 crore. The gap between the gross NPA and net NPA shows that the provisioning coverage ratio of HUDCO is 95%, meaning most bad loans have already been fully provided for and are unlikely to materially affect the company's books, Kulshrestha said.
The asset quality also improved during the June quarter. Gross NPA narrowed to 0.96% at the end of Q1FY27 from 1.34% a year earlier, while net NPA declined to 0.048% from 0.053%, according to the company's quarterly results announced on Monday.
Growth engines
The clean-up comes as the state-run lender diversifies beyond its traditional housing finance business into urban infrastructure, renewable energy and rental housing to support the next phase of loan growth.
HUDCO is working with the governments of Maharashtra and Odisha to finance rental accommodation projects, particularly in industrial corridors, and is drafting a new policy for the segment.
"We are working on a new policy for rental housing. We are already in talks with Odisha and Maharashtra. We will expand it further going ahead," he said.
HUDCO will finance such projects with support from viability gap funding by state governments and private developers, while capping rental annuity, Kulshrestha said.
The company also plans to step up lending for infrastructure in emerging satellite cities, renewable energy projects and electric vehicle charging infrastructure.
Amid India's energy transition, HUDCO's loan portfolio for green power projects stands at ₹2,390 crore, according to its Q1FY27 investor presentation.
"We plan to expand our green power portfolio going ahead," he said.
The company's broader sustainability portfolio totals ₹20,783.67 crore, including green power. The largest component is water supply, treatment plants and pipeline projects, with cumulative lending of ₹16,507.94 crore. HUDCO's affordable housing portfolio currently stands at ₹42,445 crore.
Strong momentum
Loan sanctions in the first quarter of FY27 rose 91% year-on-year to ₹65,485 crore, compared with ₹34,224 crore in the corresponding period last year.
The company's total loan book has now reached ₹1.73 trillion.
Kulshrestha attributed the strong growth to rising investments in infrastructure projects such as highways, airports, new cities and urban infrastructure.
HUDCO reported a 35.05% year-on-year rise in net profit to ₹851.11 crore for the April-June quarter, while revenue from operations increased 26.55% to ₹3,717.17 crore.
At around 12.50 pm, HUDCO shares on the BSE were trading at ₹197.75, up 1.67% from the previous close.