Hudco hits over 5-yr high; stock zooms 95% since April on positive outlook

Shares of Housing & Urban Development Corporation (Hudco) moved higher by 17 per cent to Rs 84.33, hitting over five-year high on the BSE in Friday's intra-day trade, on the back of heavy volumes. Thus far in the financial year 2023-24 (FY24), the stock price of Hudco has surged 95 per cent.

The stock of the state-owned financial institution company was quoting at its highest level since February 2018. It had hit a record high of Rs 102.30 on July 14, 2017.

Till 03:00 PM, a combined nearly 107 million shares, representing 5.3 per cent of total equity of Hudco, have changed hands on the NSE and BSE. In comparison, the S&P BSE Sensex was down 0.29 per cent at 66,038.

The government of India held 81.81 per cent stake in Hudco, while the remaining 18.19 per cent holding was with the public shareholders as on June 30, 2023, the shareholding pattern data shows.

Hudco is primarily engaged in activities pertaining to Housing Finance and Non-Housing Loans pertaining to Urban Infrastructure.

Various available data and reports, such as World Bank Report, NIP Report, etc., point towards a sustained increase in urbanisation level and consequent increase in investment in housing and urban infrastructure sectors. This factor is the key driver to Hudco’s business growth.

Further, the government has been undertaking various policy measures for orderly & sustainable urbanisation and catalysing steady flow of investments into the housing and urban infrastructure sector. These imply that the long-term business outlook for the company is reasonably good.

"The future outlook in terms of Government’s sectoral focus and related developments have positive implications for Hudco’s medium-term and long-term strategies," the company said in its FY23 annual report.

The enhanced allocation for Pradhan Mantri Awaas Yojana (Urban & Rural) by 66 per cent to over Rs 79,000 crore announced in 2023-24 Union Budget will have positive effect on the housing activities in the country. It is expected that viability gap funding requirements from the state governments would gather momentum by the middle of financial year 2023-24. Hudco, being a major partner in many such housing schemes by the various state governments, would stand to benefit.

Similarly, the Govt. of India's flagship programmes, AMRUT 2.0, which seeks to provide water supply to households, and Smart Cities Mission, have been allocated Rs 8,000 crore each in 2023-24 Union Budget. The Swachh Bharat Mission (U) has been allocated Rs 5,000 crore in 2023-24. All these allocations are going to catalyse investments in the urban development sector thereby creating business opportunities for Hudco, as it has been proactively assisting various state governments in implementation of Government of India programmes.

As there is need for substantial capital infusion and investment for development of ports, shipyards, Sagarmala projects and other related infrastructure projects, the blue economy opens up huge opportunities for Hudco to substantially increase its business operation in this segment, the company said.