Moody's affirms HUDCO's credit rating, stable outlook mirrors India's sovereign

Moody's Ratings, Singapore, has affirmed Housing and Urban Development Corporation Limited's (HUDCO) ratings at "Baa3" with a 'Stable' outlook, aligning with India's Sovereign Rating. This decision, communicated via a press release on October 3, 2025, reflects Moody's assessment of very high support from the Government of India, evidenced by its 75% ownership and integral role in government housing and urban infrastructure policies.

HUDCO's ba1 standalone assessment is based on stable asset risks and profitability over the next 12-18 months, supported by state government guarantees on most loans. The company's strong access to funding from banks and bond markets, attributed to its government linkage, helps mitigate risks associated with high reliance on wholesale funding and declining capital ratio amidst high loan growth.

The rating could be upgraded if India's sovereign rating improves or if HUDCO's liquidity significantly strengthens over a sustained period while maintaining asset quality and capitalization. Conversely, a downgrade of the sovereign rating or weakening government support could lead to a lower rating for HUDCO.