hudco has received credit rating affirmation from India Ratings and Research Limited, maintaining its strong IND AAA/Stable rating across all financial instruments. The rating agency's comprehensive review covers multiple debt instruments totaling over ₹2.70 lakh crore, reflecting the corporation's robust financial position and strategic importance in India's housing and urban infrastructure sector.

Rating Actions and Instrument Details

India Ratings has taken multiple rating actions across HUDCO's diverse borrowing portfolio:

The ₹70,000 crore proposed bonds include a sub-limit of ₹7,000 crore for subordinated debt, providing HUDCO with enhanced financial flexibility for its expansion plans.

Strong Financial Performance Drives Rating Affirmation

The rating affirmation reflects HUDCO's continued strong financial performance in 9MFY26, characterized by significant growth across key metrics. The corporation's loan book expanded substantially to ₹1,556.31 billion at 9MFYE26, compared to ₹1,189.31 billion in 9MFYE25 and ₹1,248.28 billion at FYE25. This growth trajectory demonstrates HUDCO's expanding role in financing India's infrastructure development.

HUDCO's disbursement activity reached ₹413.47 billion in 9MFY26, substantially higher than ₹317.60 billion in 9MFY25 and ₹400.38 billion in FY25. The proportion of urban infrastructure financing in the loan book increased to 66.07% at 9MFYE26 from 59.83% in 9MFYE25, indicating the corporation's strategic focus on infrastructure development.

Asset Quality and Capital Adequacy Improvements

HUDCO demonstrated notable improvement in asset quality metrics during the review period. The gross non-performing asset ratio improved to 1.08% in 9MFY26 from 1.88% in 9MFY25, while the net NPA ratio declined to 0.06% from 0.27%. The provision coverage ratio remained robust at 94.70% in 9MFY26, compared to 85.60% in 9MFY25.

The capital adequacy ratio moderated to 38.28% in 9MFY26 from 48.27% in 9MFY25, primarily due to sharp growth in the loan book, while remaining well above regulatory requirements.

Strategic Importance and Government Linkages

India Ratings emphasized HUDCO's continued systemic importance to the Government of India, particularly in financing housing and urban infrastructure projects. The corporation serves as the nodal agency for the 'Housing for All' scheme and actively participates in key government initiatives including Jal Jeevan Mission, Atal Mission for Rejuvenation Urban Transformation, and Pradhan Mantri Awas Yojna.

HUDCO's loan portfolio remains predominantly focused on state government agencies, with their share reaching 98.85% in 9MFY26. The majority of outstanding loans are backed by state government guarantees, with over 80% of the asset book supported by such guarantees, significantly mitigating credit risk.

Profitability and Operational Efficiency

Despite competitive pressures, HUDCO maintained healthy profitability metrics. The net interest margin stood at 2.88% in 9MFY26, while the interest spread remained stable at 1.97%. Net income for 9MFY26 reached ₹20.53 billion, with return on average assets at 1.90%. The corporation's pre-tax profit stabilized at ₹26.0 billion in 9MFY26.

India Ratings expects HUDCO's profitability to remain above 2.5% in the near-to-medium term, supported by continued loan book growth and strategic positioning in the infrastructure financing sector. The rating agency noted that HUDCO's classification as an infrastructure finance company in August 2024 may lead to increased private sector lending opportunities while maintaining focus on public-private-partnership schemes.

NBCC (India) Limited has entered into two strategic Memorandums of Understanding (MoUs) with HUDCO, marking a significant collaboration between the two government enterprises. The partnership aims to leverage the respective strengths of both organizations in property redevelopment and asset monetization activities.

Property Redevelopment Initiative

The first MoU establishes a framework for the redevelopment of a substantial leasehold property in New Delhi. The collaboration encompasses comprehensive development activities for the strategic location.

The redevelopment project will require separate project-specific agreements to be signed after finalizing the scope of work and terms and conditions mutually agreed upon by both parties.

Asset Monetization Partnership

The second MoU focuses on asset monetization activities for NBCC's self-sustainable model projects. This arrangement creates a structured approach to funding and managing infrastructure projects with clear role definitions for both organizations.

Key Collaboration Areas:

• HUDCO will provide funds for ongoing and upcoming projects of NBCC's self-sustainable model
• NBCC will provide Project Management and Marketing consultancy services
• All activities require permission from the Government of India
• Terms and conditions will be mutually agreed upon for each project

Agreement Terms and Governance

Both MoUs incorporate standardized terms to ensure effective collaboration and project execution. The agreements establish clear frameworks for partnership management and project oversight.

Strategic Significance

The partnership between HUDCO and NBCC represents a collaborative approach to urban development and infrastructure projects. Both organizations, being government enterprises, bring complementary expertise to the partnership - HUDCO's financial capabilities and NBCC's project management and construction expertise.

The MoUs were signed by senior executives from both organizations, with Radha Roy, Executive Director of Property Development & Consultancy Services representing HUDCO, and Pradeep Sharma, Executive Director (Engineering) and RBG-Head of Business Development Division representing NBCC. The agreements establish a foundation for future collaboration while maintaining flexibility through project-specific agreements for individual initiatives.