Housing and Urban Development (NSE:HUDC) Corporation Ltd (HUDCO) confirmed on Tuesday, March 18, that it has executed a substantial loan agreement worth INR 11,000 crore with the Andhra Pradesh Capital Region Development Authority (APCRDA). This landmark deal will finance the development of Amaravati, the new capital city of Andhra Pradesh.
The agreement, executed on March 16, follows the board’s approval granted on January 22, 2025. When stock exchanges sought clarification, HUDCO explained that as an NBFC-Infrastructure Finance Company, extending loans is part of its normal business operations and didn’t warrant separate disclosure under SEBI regulations.
This massive loan agreement comes alongside other positive developments for the company. Last week, HUDCO declared a second interim dividend of INR 1.05 per equity share for the current financial year. The infrastructure financier has also set ambitious growth targets, with Chairman and Managing Director Sanjay Kulshrestha announcing plans to increase its loan book to INR 1.5 lakh crore in FY26, up from the INR 1.2 lakh crore target for the current fiscal year.
Kulshrestha remains optimistic about FY26, citing the Indian government’s significant infrastructure budget allocation of INR 97,000 crore for urban development, including funding for metro projects, housing, and industrial housing—all areas where HUDCO plays a critical financing role.
Valuation Perspective
With this substantial loan execution and ambitious growth plans, investors might be wondering about HUDCO’s current valuation relative to its growth prospects. According to InvestingPro’s sophisticated fair value analysis, HUDCO’s shares are currently trading very close to their intrinsic value, suggesting the market has efficiently priced in the company’s growth prospects and risk factors.
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InvestingPro’s fair value assessment employs multiple financial models to arrive at a comprehensive valuation, accounting for HUDCO’s loan book expansion, earnings potential, and the infrastructure financing landscape in India. This nuanced approach helps investors understand whether the current price represents a buying opportunity or if the positive news is already reflected in the stock price.
For investors seeking deeper insights into HUDCO and similar infrastructure financing companies, InvestingPro offers a suite of analytical tools that go beyond standard metrics. With subscription discounts of up to 45% currently available, investors have a timely opportunity to access these professional-grade tools and determine whether HUDCO’s latest developments justify an adjustment in their investment strategy.
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