HUDCO’s long term Credit Rating upgraded to “AAA”.

HUDCO’s long term Credit Rating upgraded to “AAA”.

India Rating and Research Pvt. Ltd. (Fitch group) has assigned HUDCO “AAA” rating with a stable outlook for the forthcoming domestic bonds Issue. India Ratings (Ind-Ra) has upgraded HUDCO’s Long – Term Credit Rating to ‘IND AAA’ and affirmed Short-Term  Credit Rating at ‘IND A1+’.

 

The upgrade reflects Ind-Ra’s expectation of change in HUDCO’s role to a public policy institution from a public finance institution earlier. Ind-Ra expects GoI would continue to provide timely support to HUDCO as reflected by the recent GoI notification which has authorised HUDCO to issue tax-free bonds to the tune of INR50bn in this fiscal. GoI has very well acknowledged the fact that HUDCO is a primary policy institution with a social mandate to meet the housing needs of economically weaker section (EWS)/ low income group (LIG) category. Hence it has assigned HUDCO as one of the central nodal agencies to channelize and monitor the progress of the credit-linked subsidy under Housing for all (HFA) by 2022 / ‘Pradhan Mantri AwasYojana (PMAY)’ to the lending institutions.

 

HUDCO has mobilised refinance assistance of INR17bn in FY15 from NHB under its rural housing fund and urban housing fund. The access to cheaper funds has helped HUDCO to increase its loan exposure to social housing for the economically weaker sections and low income groups, as well as to non-commercial urban infrastructure. The incremental cost of funds would reduce further in FY16 as GoI has notified HUDCO to issue low-cost tax free bonds of INR50bn.

 

HUDCO has posted an impressive Profit After Tax (PAT) of Rs.777 crore (provisional) as against Rs. 726.34 crore in the previous year. HUDCO is a more profitable entity than most of its peers in terms of better higher net interest margin (NIM), pre-provision operating profitability (PPOP) and return on average assets (RoAA).

 

During 2014-15, HUDCO mobilized total resources aggregating to Rs. 5074.37 crore at a weighted average borrowing cost of 8.18 % (i.e. 38 bps above 10 yr. G.Sec. as on 31.03.2015).  Further, HUDCO maintains a healthy Tier-I Capital Ratio, which is 51% in FY 2015. They provide notice this much of the class teaching, supporting groups of up to students

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