1. At a Glance – The Boring Giant That Quietly Moves ₹1.18 Lakh Crore
If safety had a PSU Aadhaar card, it would look suspiciously like Housing & Urban Development Corporation Ltd. HUDCO today sits at a market cap of ₹40,849 crore, trades around ₹204, and has managed to offend both bulls and bears equally over the last three months with a -13.9% return. The stock hasn’t crashed, hasn’t rallied — it has just existed, like a government file moving from one desk to another.
But under this sleepy price action is a loan book that ballooned from ₹84,424 crore (9MFY24) to ₹1,18,931 crore (9MFY25). That’s not growth — that’s civil-engineering-grade expansion. Yield on loans stands at 9.43%, cost of funds at 7.46%, delivering a clean 3.19% NIM without doing any startup gymnastics.
Gross NPAs are a microscopic 1.88%, net NPAs an almost imaginary 0.27%. Why? Because 98.3% of HUDCO’s borrowers are governments and their agencies. If your customer is the state government, default risk is not a credit issue — it’s a fiscal patience issue.
HUDCO trades at 14.7× earnings and 2.26× book, offers a 2.03% dividend yield, and maintains ROE of ~15.7%. Not cheap like REC or PFC, but also not pretending to be a fintech. The real story? A balance sheet that looks like it was designed by an IAS officer with OCD.
2. Introduction – HUDCO Is Not Sexy, And That’s the Point
HUDCO is not here to trend on Twitter. It does not fund flashy EV startups or consumer apps. It finances roads, metro lines, water supply, sewage systems, affordable housing, and basically everything politicians love inaugurating with oversized scissors.
Incorporated as a public financial institution, HUDCO’s job is simple: lend money where private banks hesitate, especially to social housing and urban infrastructure. And unlike most PSU stories, HUDCO actually does this job profitably.
What makes HUDCO interesting is not innovation — it’s predictability. When the Government of India says “Housing for
All”, HUDCO doesn’t tweet support. It signs MoUs worth ₹1 lakh crore and arranges funding lines.
The Government of India holds ~75% stake, making HUDCO strategically untouchable. This also means two things:
- HUDCO will never become wildly efficient like a private NBFC.
- HUDCO will also never be allowed to fail.
If this were a Bollywood character, HUDCO would be the boring but rich uncle who funds everyone’s weddings and never asks for equity upside.
Question for you: Would you rather own a flashy NBFC or a boring one that governments can’t afford to let default?
3. Business Model – WTF Do They Even Do?
HUDCO’s business model is refreshingly unambiguous:
- Lend long-term money
- To governments
- For housing and infrastructure
- At controlled but profitable spreads
Core Lending Segments
- Urban Infrastructure – 59.83%
- Affordable Housing – 40.17%
That’s it. No gold loans. No microfinance. No personal loans with Bollywood endorsements.
Borrower Profile
- Government & Government Agencies – 98.3%
- Private Sector – 1.7%
HUDCO is basically a wholesale lender to states. Telangana and Andhra Pradesh alone form a meaningful chunk of the portfolio — which introduces concentration risk, but also political commitment risk (which in India is oddly safer).
HUDCO also provides consultancy services for urban projects, but let’s be honest — this is pocket change compared to the loan book.
The recent NBFC-IFC (Infrastructure Finance Company) status from RBI
