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State-run housing financing firm aims to ramp up infra lending and utilise modern financing tools to nearly double its portfolio by 2030
Housing and Urban Development Corporation Limited (HUDCO), the Navratna public sector lender under the Ministry of Housing and Urban Affairs, is looking to grow aggressively with a loan book target of over Rs 3 lakh crore by 2030 [1], climbing from Rs 1.6 lakh crore now. As part of this growth, the company will diversify its fundraising this year and is looking to offer social impact bonds (SIBs), which are a form of financing housing and urban infrastructure projects where the return to the investor is linked to the achievement of social outcomes.
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Why It Matters for India’s Infrastructure Push
HUDCO’s ambitions align with India’s broader infrastructure financing needs. Government estimates suggest infrastructure investment of roughly Rs 143 lakh crore [2] will be required by 2030 to support the country’s growth trajectory, and the Union Budget has raised public capital expenditure to a record Rs 12.2 lakh crore for FY 2026-27 [3], up from Rs 11.2 lakh crore in FY 2025-26.
Key HUDCO Numbers Driving the Growth Story
| Metric | Value | Period |
| Loan book | ~Rs 1.6 lakh crore (targeting Rs 3 lakh crore) | Current vs 2030 target |
| Loan book (audited) | Rs 124,828 crore, up ~35% YoY | FY25 |
| Total income | Rs 10,348 crore, up ~29% YoY | FY25 |
| Q4 FY26 net profit growth | +172% YoY (₹1,981.31 crore) | Q4 FY26 |
| Gross NPA / Net NPA | 1.67% / 0.25% | FY25 |
| Capital adequacy ratio | 46.60% (vs 15% regulatory requirement) | FY25 |
| FY26 borrowing plan | Raised from Rs 65,000 crore to Rs 80,000 crore | FY26 |
| Committed sanction pipeline | ~Rs 2.5 lakh crore | Ongoing |
| Market capitalisation | Crossed Rs 42,000 crore | FY25 onward |
Sources: HUDCO
Strategic Priorities
Led by CMD Sanjay Kulshrestha, HUDCO’s leadership has crafted a roadmap with several methods to achieve the target set for 2030:
- Diversifying borrowing methods to include social impact bonds, as well as perpetual Tier-1 bonds and 54EC capital gains bonds, to expand the investor base and reduce the cost of funds.
- Deleveraging to reduce the debt-to-equity ratio to below 6 by using perpetual debt and retained earnings.
- An objective of a Zero NPA on new sanctions, and the recovery of approximately Rs 500 crore of the outstanding Rs 1,600 crore NPA, with legacy bad debt from pre-2013 private sector lending, which HUDCO is no longer engaging in.
- Taking an Infra-beyond-housing approach: the financing of Metro Rail, Airports, Green Energy, Roads and Expressways, in addition to the core business of providing assistance to the PMAY 2.0 Scheme.
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What Are Social Impact Bonds?
Social impact bonds are a form of innovative financing based on outcomes, in which private capital is used to fund a public goal, and in the event that the goal is reached, the government (or outcome payer) is responsible for reimbursing the investment, plus a return. SIBs continue to be a niche and a developing financing instrument outside of India, and the interest in them from an AAA-rated PSU like HUDCO would be a positive effort in the financing of public infrastructure in India, although the details with respect to the amount, timing, and the sectors of interest are yet to be defined.
The Bigger Picture
With the predictions of India becoming the third-largest economy in the world and a ~$7 trillion economy by 2030 [4], HUDCO’s growth, along with the government’s Viksit Bharat@2047 vision, will help position the corporation as a key financer of both housing and infrastructure in the future.
Sources:
- https://www.moneycontrol.com/news/business/economy/hudco-plans-social-impact-bonds-this-year-eyes-rs-3-lakh-crore-loan-book-by-2030-13969591.html
- https://www.crisil.com/en/home/newsroom/press-releases/2023/10/indias-infrastructure-spending-to-double-to-rs-143-lakh-crore-between-fiscals-2024-and-2030-compared-with-2017-2023.html
- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2221425®=48&lang=2
- https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=155121&ModuleId=3®=48&lang=2
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