Housing and Urban Development Corporation Ltd. has significantly expanded its infrastructure financing capabilities with a major memorandum of understanding with the Bihar government to provide term loans of up to ₹1 trillion over the next five years for urban infrastructure projects. According to the company's regulatory filing, the proposed financing is equivalent to about $10.5 billion at current exchange rates. Under this arrangement, HUDCO intends to extend funding for a range of urban infrastructure projects, including land acquisition and greenfield satellite cities development in Bihar. The financing package includes flexible terms with a moratorium period and repayment tenure of up to 25 years, with repayment obligations met through revenue generated from projects and secured through ring-fenced revenue streams from identified receivables or state budget allocations.
Housing and Urban Development Corporation Ltd. reported significant growth in loan operations during the first quarter, with loans sanctioned increasing to ₹65,485 crore compared to ₹33,904 crore in the same period last year. According to the company's business update, loan disbursements also rose by 27.83% to ₹16,377 crore from ₹12,812 crore in the year-ago period. For the full financial year 2026, HUDCO's loans sanctioned stood at ₹1.65 lakh crore marking a 28.76% YoY growth from ₹1.28 lakh crore in the year-ago period, while disbursements reached ₹51,194 crore, reflecting a 27.87% YoY rise from ₹40,037 crore in FY25.
The state-run company's financial performance showed strong improvement during the March quarter, with net profit more than doubling to ₹1,981 crore from ₹728 crore in the previous year. This growth was aided by a tax credit of more than ₹1,300 crore. The company's net interest income (NII) increased by 16.6% to ₹1,149.7 crore from ₹985.7 crore in the fourth quarter of the previous fiscal. In Q4 FY26 specifically, HUDCO recorded a 172% YoY surge in consolidated net profit to ₹1,981 crore compared with ₹723 crore in the year-ago period, with the sharp surge due to a large deferred tax credit of ₹1,530.32 crore that significantly reduced the overall tax outgo. HUDCO's board had also approved a dividend of ₹1.5 per share for the entire fiscal year.
The company's asset quality remained largely stable during the March quarter, with gross credit impaired assets ratio contracting to 1.04% from 1.08% sequentially, while net credit impaired assets ratio stood at 0.05% from 0.06%. According to the exchange filing, no new NPAs were added last year with recoveries standing at ₹403 crore. HUDCO has experienced a sharp shift towards urban infrastructure financing, which now forms nearly 74% of the total loan book at the end of the previous financial year.
Despite the positive quarterly results, HUDCO shares ended 1.1% lower on Tuesday at ₹205.7. However, the stock has shown recent strength, jumping over 3% as of 11:04 AM trading at ₹209.48 per equity share, with the scrip gaining 1% in the past week and more than 3% over the month. The stock has a total market capitalisation of ₹41,939.81 crore as of July 1, 2026, according to NSE data. While the share hit a 52-week high of ₹246.85 on November 18, 2025, it touched a year's low of ₹159 on March 30, 2026. Overall borrowing costs came down to 6.56% in financial year 2026 from 7.44% in the previous financial year, as reported in the company's business update.
In addition to the Bihar partnership, HUDCO has also signed a memorandum of understanding with the Government of Gujarat on June 17, as reported in a regulatory filing. Under this MoU, HUDCO aims to provide financial assistance of up to ₹1 lakh crore during the next two years to identified infrastructure projects, towards overall economic development of the State of Gujarat. The Bihar MoU represents another major expansion in the company's lending portfolio, with the agreement remaining valid for three years from execution date and subject to annual review. These strategic partnerships demonstrate HUDCO's commitment to supporting infrastructure development across key states and position the company as a major player in India's urban infrastructure financing landscape.
