ICRA Limited has assigned/reaffirmed the credit ratings for Housing & Urban Development Corporation Limited (HUDCO) on 14 May 25. Key rating actions and details are as follows:
- ICRA assigned an [ICRA]AAA (Stable) rating for a new Long-term borrowing programme FY2026 of ₹65,000 crore.
- ICRA reaffirmed the [ICRA]AAA (Stable) rating for the Long-term borrowing programme FY2025 of ₹42,775 crore.
- ICRA reaffirmed and assigned the [ICRA]AAA (Stable)/[ICRA]A1+ rating for the Long-term/Short-term fund based/Non-fund based limits, enhancing the amount from ₹50,000 crore to ₹1,30,000 crore.
- ICRA reaffirmed the [ICRA]A1+ rating for the Commercial paper programme of ₹10,000 crore.
- The total rated amount has increased from ₹1,29,810 crore to ₹2,47,775 crore.
- ICRA reaffirmed and withdrew the [ICRA]AAA (Stable) rating for a ₹27,035 crore Long-term borrowing programme (FY2025) as there was no amount outstanding.
- The ratings derive strength from HUDCO's sovereign ownership (75% by GoI), strategic role as a nodal agency for housing and urban infrastructure, and low credit risk profile due to government-backed exposures.
- Healthy capitalisation (CRAR of 47% as on 31 March 25), adequate earnings, good financial flexibility, and diversified resource profile also support the ratings.
- Gross Stage 3 assets improved to 1.7% and Net Stage 3 to 0.2% as on 31 March 25 (compared to 2.7% and 0.4% on 31 March 24), supported by strong book growth and recoveries.
- Profit after tax (PAT) was ₹2,709 crore in FY2025, up from ₹2,117 crore in FY2024, with Return on Managed Assets (RoMA) at 2.4% in both years. Profitability is expected to remain adequate.
- Key challenges include concentration risk to states like Telangana and Andhra Pradesh, although this is declining with book growth and mitigated by government guarantees.
- The Stable outlook reflects ICRA's expectation of HUDCO's continued strategic importance to the GoI and maintenance of its financial profile.