HUDCO aims ₹3 trillion loan book by 2030; eyes PPP infra financing

New Delhi: State-run Housing & Urban Development Corporation (HUDCO) is looking to increase its lending nearly 200% to ₹3 trillion by the end of this decade to meet an expected demand for affordable housing and infrastructure financing, chairman and managing director Sanjay Kulshrestha said.

In an interview to Mint, the CMD also said that HUDCO is looking at opportunities to expand its presence internationally in the project consultancy business. 

HUDCO is studying PPP models for infrastructure financing and is also undertaking a recruitment process for employees to operate in that space, he said, even as it waits for the Reserve Bank of India (RBI) to approve its application for NBFC-IFC (infrastructure finance company) status.

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"By 2030, in terms of loan book, very easily we will be achieving a ₹3 lakh crore (trillion) loan book, if we go very cautious, and we are very clear that good business has to be done. By that time, we will be starting PPP and looking at private sector also. All these things will add towards our loan book," he said. 

Its loan book currently stands at ₹1.03 trillion.

"To start with we have started studying the PPP models where the cash flow is guaranteed through, some regulatory arrangements, like power energy...We don't want to take any risk of NPA and we have reduced our and net NPA to the level of 0.36% which is I think no other financial institution has that kind of value," he said.

The company which was accorded the Navratna status in April, has a presence across housing, infrastructure financing and consultancy services.

In the lending space, apart from affordable housing, it also finances roads and urban mobility projects, social infrastructure including hospitals and government buildings, water supply, sewerage and solid waste management projects along with projects in the renewable energy space.

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Kulshrestha said that currently housing accounts for about 51% of the company's loan portfolio, while the remaining 49% is composed of loans towards infrastructure, including water, roads, power, sewage, town planning, land acquisitions, multilateral corridors and metro rail.

Housing to remain driver of growth

In the next two-three years, housing would continue to be the driver of the company's growth owing to the ambitious Pradhan Mantri Awas Yojana 2.0 scheme, by which the Centre aims to help build 10 million homes in urban areas. Out of the estimated ₹10 trillion investment required for the scheme, the Centre would provide ₹2.2 trillion and state governments the remaining ₹7.8 trillion.

The CMD said there is significant potential for HUDCO to finance the ₹7.8 trillion to the states.

On plans for making an international foray in the consultancy business, he said the public sector lending major is in talks with EXIM Bank and other stakeholders.

"In consultancy we are open (for international foray) and we are discussing with EXIM bank and finance ministry also. Starting from housing, water, to any infrastructure, we have a very robust consultancy team with us."

Kulshrestha said the company had applied for an NBFC-IFC status by the end of 2023. “We are hoping that hoping that RBI will schedule us as an NBFC IFC very soon. It will enhance our borrowing limits and landing limits.”

On Monday, HUDCO reported a 25% growth in its net profit for the first quarter of FY25 at ₹557.75 crore. Its total income for the April-June quarter was ₹2,197.19 crore, with a 19% YoY growth.

Its shares on the BSE closed at ₹288.05 on Tuesday, lower by 4.05% from its previous close.lso n the next two-three years, housing would continue to be the driver of the company's growth