It's an IPO season. After IRBs' InvIT, state-owned Housing and Urban Development Corporation Ltd (HUDCO) will raise Rs 1,200 crore from the markets. Dr M Ravi Kanth, Chairman and Managing Director, divulges the company's future strategy in an INFRASTRUCTURE TODAY exclusive.
HUDCO has come out with an IPO this month. What was the rationale behind it?
Through this Initial Public Offering (IPO), we plan to garner (around) Rs 1,200 crore. The objective of this IPO is to carry out the Centre's divestment plan in this entity, of 2 crore equity shares. Basically, we offer housing and urban finance under one roof.
However, the entity's main thrust has been housing finance, followed by infrastructure financing. This will be the first IPO of a government company since the disinvestment process started last year. And guess what?
The IPO comes at an opportune time, as the BSE Sensex has touched the 30,000-level. Through this IPO, we plan to divest 10.19 per cent in the company.
Which are the important sectors where HUDCO has routed its funds?
We have a dual focus towards infrastructure development and housing finance, sectors that have emerged to be of primal focus for the Centre. As of now, 89.93 per cent of HUDCO's loan advances are to state government projects, followed by 31 per cent of housing loans. The company's current outstanding loan portfolio is Rs 36,385 crore, of which Rs 11,228 crore has been lent to housing finance and Rs 25,157 crore to urban infrastructure.
In this case, how much has been sanctioned since inception?
Our total loan sanctioned since inception stood at Rs 1,63,140 crore, of which Rs 60,230 crore or 39 per cent were housing finance loans, and Rs 1,02,910 crore or 61 per cent were urban infrastructure finance loans as of 9MFY17. In the last fiscal, we have sanctioned Rs 30,000 crore, of which Rs 9,500 crore has been attributed to (the) housing sector.
We also provide consulting services for government housing and urban infrastructure programmes, such as DAY-NULM, JNNURM & PMAY-HFA (Urban), through the appraisal and monitoring of projects.
Since 'Housing for All' is a part of the Smart Cities initiative, how is HUDCO likely to facilitate funds for this initiative?
In the overall Smart Cities' programme, state governments have a major role to play in garnering funds to plan their envisaged projects. Since it is mandatory to form a Special Purpose Vehicle (SPV), the loans will be routed to Smart City projects through SPVs. Until now, the Pune Municipal Corporation has approached us for funds to the tune of Rs 3,000-Rs 5,000 crore.
These Smart Cities have been selected on the basis of their strengths, and various state governments have a major role to play. I came to know that they are going to form SPVs, so they will take the loan, and we will have our conditions stipulated for it.
- RAHUL KAMAT