Summer Internship Project

Project Heading: Analysis of decrease in Bond rate of HUDCO

Submitted in partial fulfillment of PGDM program

2013-15

Submitted by

Name: Rahul Thukral

Roll Number: 131

Corporate Mentor Faculty Mentor

Name : Ms Nishi Chugh Name : Prof.Kamal Kishore

Designation: Assistant CFO Designation: Dean

Company : HUDCO

Apeejay School of Management

Dwarka, New DelhiJune 2014

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CERTIFICATE

This is to certify that the project work done on Analysis of Decrease in Bond Rate of HUDCO Submitted to Apeejay School of Management, Dwarka by Rahul Thukral in partial fulfillment of the requirement for the award of PG Diploma in Management, is to the best of my knowledge a bonafide work carried out by him under my supervision and guidance. This work has not been submitted anywhere else for any other degree/diploma. The original work was carried out during 10th April to 10th June 2014 in Housing and Urban Development Corporation Limited.

Date: Seal/Stamp of the Organization

Signature:

Name of the Corporate Mentor: Ms Nishi Chugh

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CERTIFICATE

This is to certify that I (Rahul Thukral) Roll No. 21/131 have carried out my Summer internship in Housing and Urban Development Corporation Limited in the area of Resource mobilization . It is also certified that the work done by me is original with due references of sources, and has not been submitted elsewhere for the award of any diploma or degree.

Name of the Student

Date :

Countersigned by Faculty Mentor

Signature

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Acknowledgement

To accomplish even a small task proper guidance and encouragement is essential . It gives me

great pleasure to excess my deep sense of gratitude and reverence to every person who directly

or indirectly has helped to create a congenial atmosphere for successful completion of this

project report.

I would like to extend my sincere thanks to Ms Nishi Chugh, Assistant Chief Financial Officer,

HUDCO Limited under whose guidance and support throughout my training period at HUDCO

Limited., New Delhi. Her calm demeanor and willingness to teach me was a constant source of

encouragement which helped me in successful completion of project. My learning has been

immeasurable and working under them was a great experience. My sincere thanks also extend to

all the staffs of HUDCO Ltd. for providing a hospitable and helpful work environment and

making my summer training an exciting and memorable event.

My heartfelt thanks are also towards the guide of my Institute i.e. Prof. Kamal Kishore without

his continuous help and enthusiasm the project would not have been materialized in the present

form. I will my gratitude to Mr. Sham Gulati (SENIOR FINANCE OFFICER- HUDCO Ltd)

who helped me a lot in completing my project successfully.

Finally, I also wish to thank the all the teachers of Apeejay School of Management

Dwarka, New Delhi New Delhi for making this experience of summer training in an esteemed

organization HUDCO Ltd. possible. The learning from this experience has been immense and

would be cherished throughout life.

Rahul Thukral

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INDEXS.NO. PARTICULARS PAGE NO.

1 Preface

2 Certificate from Organization

3 Certificate from Faculty Mentor

4 Acknowledgement

5 Chapter 1-The area of Internship and learning

objective

a Abstract

b Overview of the Industry

c Proposed strategy for mobilization of resources

d Resource Requirement

e Financial Sector in India

6 Chapter 2-Profile of the Company

a HUDCO at a Glance

b HUDCO-A leader in sustainable Habitat & Urban

Development

c MOU between HUDCO & M/o Housing & Urban

Poverty Alleviation

d Emerging Issues and Challenges

e Corporate Social Responsibility

7 Chapter 3- Job Description & Functional Profile

a Approach to problem-Understanding Rating

Criteria

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b SWOT Analysis of HUDCO

8 Chapter 4- Learning Experience & the

Insight Gained

a Research Methodology

b Objective of the Study

c Analysis of HUDCO Data

d Selecting the Organization

e Profile of Rural Electrification Corporation Limited

f Analysis of REC Data

g Market Comparison of HUDCO & REC Data

9 Chapter 5- Data Analysis

a Level of Earning

b Profitability of HUDCO & REC

Recommendation & Conclusion

Bibliography

CHAPTER-17

The Area of Internship and

Learning Objectives

ABSRTACT:

HDCO`s bond is currently rated “AA+” that leads to a bit higher borrowing cost compared to the

organizations whose bond are rated “AAA”. This project is intended to find out the causes

behind the lower bond rating of HUDCO. The first step in this project is to understand the

criteria for Financial Institutions rating-by-rating agencies. There are a lot of criteria like criteria

like capital adequacy, operating efficiency, risk appetite, Earning capacity, Asset quality,

management efficiency, etc. Once the criteria are clear, an organization with the same asset

profile and industry is selected. Here REC is selected for its similarity with the HUDCO then

REC and HUDCO`s operational and financial activities have been analysed to pin point the

causes where HUDO needs to improve.

HUDCO is mainly lagging behind in its operational activities. REC is able to mobilize

approximately double the funds compared to HUDCO with the same operational expenses.

HUDCO`s internal research and market information wing needs revitalization because HUDCO

is in the business of lending fund that is very dynamic, it is essential to grab the opportunity at

right time. HUDCO need an in house treasury so that it can utilize the extra fund more

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effectively. HUDCO can also focus on increasing its fee based income because for fee based

income operating cost is low so by increasing fee based income HUDCO can improve its

operational efficiency.

OVERVIEW OF THE INDUSTRY

FINANCIAL SECTOR

The area of learning is study the financial health of Government companies which provide loan to vulnerable section of the societies and compare their financial performance and find out their bond rating and recommend suitable measure to improve the bond rating .The area of my internship is resource mobilization and I have entrusted with the task is analyzing the reason of decrease in Bond rate of HUDCO.

BACKGROUNDResource Programme of 2013-14 of HUDCO, there is Memorandum of Understanding between MOUE&PA and HUDCO for the Financial Year 2013-14 envisages loan sasnction of Rs 15000 crore and loan releases of Rs 6602 crore as per the BE(Mou) excellent target. Accordingly, pending finalization and approval of the annual resource program for the Financial Year 2013-14 , the Board in its 514th meeting held on 20.03.2013 accorded its approval for permitting for permitting borrowings to the maximum of Rs 1500 crore during the interim period in order to meet operational and statutory requirement .

RESOURCE MOBILIZATION & COST REDUCTION EFFORTS

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The Board in its 500th meeting held on 24.04.2012 had approved borrowing program of Rs 10,000 crore in Financial Year 2012-13 , HUDCO has been able to mobiliz total resources amounting to Rs 6063.06 crore till now.

PRPOSED STRATEGY & ACTION PLAN FOR MOBILIZATION OF RESOURCES DURING FINANCIAL YEAR 2013-14

(a) It is proposed that resources in Financial Year 2013-14 may be raised through a mix of long term & short loans, bonds/debentures (including tax free bond),Loan against fixed deposit, cash credit/overdraft facility ,public deposits, commercial paper/structured paper, FCNR(B) loans, refinance assistance, external commercial borrowings from multilateral institutions /international agencies etc. Which would ensure prudent treasury management and lower interest cost. The short term funds may be availed on need basis to meet liquid operational requirement and be replaced by long term loans at an opportune time , so as to minimize the cost of idle funds. Such short term funds may be raised through loans/cash credit/overdraft facilities from banks/financial institutions ,existing & fresh line of credit ,issuance of short-term bonds/debentures, commercial paper etc.

(b) Borrowing through the External Commercial Borrowing (ECB) route may be considered, subject to RBI approval being obtained ,so as to diversify the resource base of HUDCO. Such external commercial borrowings may be made through bonds(i.e debt market instruments),syndicate loans, bilateral /multilateral loans etc.

© The possibility of borrowing through laons/lines of credit from multilateral institutions /international agencies such as World Bank, ADB,JBIC,USAID etc. shall be explored.

RESOURCE REQUIRMENT- 2013-14The total resource requirement for Financial Year 2013-14 has been worked out keeping in view

the following factors pertaining to Financial Year 2013-14 Release target as per BE(MoU) for loan release of Rs 6602 crore which is based on the excellent category of the MOU for the year 2013-14. Estimated principal payable on loan liabilities. Estimated principal recovery from borrowing agencies. Estimated principal receipt under investments agencies. Estimated principal release/disbursements during 2013-14

The working for the level of borrowings required during the financial year 2013-14 has accordingly been arrived as under:

A Proposed utilization of Resources Amount(i) Principal Requirement 6602.00(ii) Principal repayment due on borrowings 5369.00

Total A 11971.00B Proposed Sources of Fund(i) Principal repayment from agencies. 3513.00

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(ii) Repayment from bonds 0.00(iii) Funds available in Bank & fixed deposit as on

31.03.2012 468.87

Total B 3981.87Borrowings Requirement (A-B) 7989.16The MOU excellent target for loan release for the year 2013-14 is Rs 6602 crore

The recovery level (considered 95%) is based on the estimated of the respective department.

Credit rating for debt instruments proposed to be mobilized during financial year 2013-14: In order to meet to meet the further fund requirement at a competitive rate, HUDCO is

requirement at a competitive rate, HUDCO is required to get itself rated by the external agencies on an overall basis and obtain initial ratings for specific instruments viz tax free and taxable bond ,commercial paper and credit facilities granted by the banks proposed to be raised during financial year 2013-14 .HUDCO Board in its meeting on 24.03.2011 had approved limited tendering system for Credit Rating as an exception to the laid down procedures/guidelines i.e inviting bids for rating of assigning highest surveillance rating to HUDCO long term instruments, post which HUDCO has been obtaining initial rating from CARE Rating and India Ratings & Research Private Limited , who have been assigning AA+ rating to HUDCO debt instrument. Another rating agency ICRA Limited has assigned credit rating of ‘AA’ . Besides these HUDCO had also assigned credit rating from Brickwork in financial year 2009-10 as ‘AAA’ which was valid for one year period. The said rating expired since no funds were mobilized through Bonds route during the financial year 2009-10. According ,in view of the approval accorded by the Board, Since CARE and India Ratings (Fitch

group) continue to assign highest surveillance rating ‘AA+’ to HUDCO debts instrument . It is proposed to continue obtaining credit rating from them for HUDCO debt instruments proposed to be issued during financial year 2013-14 as well.

Appointment of trustee for bonds (taxable & tax-free) proposed to be raised during the year 2013014:

As per requirement of SEBI, name and consent of the trustee is required to be furnished in the offer document and an NOC from Trustee is also required to be submitted to SEBI/NSE prior to obtaining in principal for listing of the proposed bonds. According, HUDCO would be required o appoint trustee for bonds (both tax free and taxable) proposed to be raised during the year 2013-14

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In this context, It is apprised that Financial Sector of India is intrinsically strong, operationally sundry and exhibits competence and flexibility besides being sensitive to India’s economic aims of developing a market oriented, industrious and viable economy.

An established financial sector assists greater standards of endowments and endorses expansion in the economy with its intensity and exposure. The fiscal sector in India entails banks, financial organization, markets and services. The sector is classified as organized and conventional sector that is also recognized as unofficial finance market.

Fiscal transactions in an organized industry are executed by a number of financial organizations

which are commercial in nature and offer monetary services to the society. Further classification

includes banking and non-banking enterprises, often recognized as activities that are client

specific.

The chief controller of the finance in India is the Reserve Bank of India (RBI) and is regarded as

the supreme organization in the fiscal structure. Other significant fiscal organizations are

business banks, domestic rural banks, cooperative banks and development banks. Non-banking

fiscal organizations entail credit and charter firms and other organizations like Unit Trust of

India, Provident Funds, Life Insurance Corporation, Mutual funds, GIC, etc.

Financial Sector of India – Eligibility for government autonomy

Mentioned below are certain criterions that are required to be fulfilled for acquiring government

autonomy in India:

Availability of sufficient fund of up to 8%

Accessibility of total non-performing wealth of below 9%

Minimum net possessed funds of more than USD 2.5 million and net revenues of

minimum past three years.

Financial institutions that satisfy the abovementioned requirements will be authorized

functional independence in almost all managerial areas.

Financial Sector of India – RBI guidelines for NBFC's

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The Reserve Bank of India has relaxed its guidelines for the operation of non-bank finance

companies (NBFCs) in India considering the various investments from the investors. It has also

permitted leasing of machinery and rent-buying credit firms with endowment level rankings to

avail public savings increase the maximum limit on the amount of public investments on these

NBFCs that may allow and expand the closing date for observance on its norms by two years.

The fiscal competitiveness of several NBFCs persists to be of importance to the administration

and reserve bank of India controllers. There is a significant merging activity in this industry as

NBFCs are regulated by stringent yardsticks that are obligatory to fulfill.

In addition, India has entered into new agreements with WTO in the area of fiscal services in

Geneva on December 1997.

Financial Sector of India – Chief Characteristics

Some of the major characteristics of Financial Sector of India are:

The financial sector of India allows Most Favored Nation (MFN) reputation to all

international banks and firms offering financial facilities.

The sector has relaxed previous MFN tax exemption on banking activities.

Allows 12 new financial bank division authorizations every year to international banks,

that is higher as compared to the existing 8 every year.

Raises the 10% limit of reinsurance by insurance firms in India.

Permits 51% foreign endowment in fiscal advisory, issuing, hiring, business enterprise

capital, business banking and non-banking credit firms.

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CHAPTER-2PROFILE OF THE COMPANY

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HUDCO AT A GLANCEHistory

The housing and urban development sector plays a significant role in the economic and social

development of a country. The access to and the quality of housing and urban basic services

directly influence the quality of life of people, their productivity levels and growth potential.

Before the establishment of HUDCO, the Government of India was operating a number

of subsidized housing schemes and loan schemes. The subsidized housing schemes were meant

for industrial workers, economically weaker section of the society and slum dwellers, while

the loan schemes were targeted for the people in the low-income and middle-income groups as

well as rental housing schemes for State Government employees. All these schemes were

under the direct control of the Ministry of Works and Housing. Such a system of housing finance

did not give the required thrust for promoting housing development activities,

which in many cases were considered of lower priority.

Towards the close of the 1960s, it was realized the need of a setting up a housing organization in

the country as the availability and cost of bank credit were the prime constraints in this

development. Since the banking industry, until then, was in the hands of a few industrial houses,

the first major step taken to initiate change in favour of the poor was the nationalization of the

banks in June 1969. However, when the then Hon’ble prime Minister Smt Indira Gandhi looked

for ways to improve the living conditions of slum-dwellers and economically less fortunate

peoples, she found that while we had a host of All India Term Lending Institution such as IDBI,

IFCI, ICICI etc; catering to the diverse credit and related needs of the Indian industry, there was

no institution to provide housing finance to the rural and urban poor or the even to meet the

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credit needs of housing boards, development authorities and other urban bodies which were

being setup by the State Government during the fourth Plan period.

It was in this context that a decision was taken at the highest level to set a Housing and Urban

Development Corporation (HUDCO) which could take a comprehensive look at the need of the

sector and find workable and effective solutions. This experiment of establishing a unique

techno-financial institution and the fascinating journey it undertook during the last four decades

would certainly qualify as one of the key developments in this sector in the whole world.

The establishment of HUDCO in 1970 as a sectoral institution for comprehensively dealing with

the problems of growing housing shortages, rising number of slums and for fulfilling the

pressing needs of the economically weaker section of the society was one of the significant steps

in the series of initiatives taken by Government.

Thus the setting up of HUDCO was aimed at accelerating the pace of construction and

elimination of housing shortages and for Orderly development of urban centres.

The Housing and Urban Development Corporation Ltd. (HUDCO) was incorporated on April 25,

1970 under the Companies Act 1956, as a fully owned enterprise of the Government of India.

Vision"TO BE AMONG THE LEADING KNOWLEDGE HUBS AND FINANCIAL

FACILITATING ORGANIZATIONS FOR HABITAT SETTLEMENT" 

Mission"TO PROMOTE SUSTAINABLE HABITAT DEVELOPMENT TO ENHANCE THE

QUALITY OF LIFE"

 

HUDCO would continue to explore opportunities in related sectors for sustainable profits, which

in turn will help it to furthur, support its social objectives. Towards expanding its role in the

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sectors, HUDCO plans to integrate itself along the complete project finance value chain and

position itself as sector expert in the identified areas. HUDCO would leverage its expertise and

experience gained over the years towards augmenting its Interest based activities. HUDCO's IT

strategy is also focused on the right technology solutions to meet its business objectives,

including setting up an industry benchmarked integrated solution spanning HUDCO's business

processes.

 

HUDCO is poised to take upon a much more significant role in the sector by supporting the

growing needs of housing and infrastructure in the coming years with the continued growth of

economy. HUDCO is also committed to play its unique social role with a special focus on the

needs for the economically weaker sections and lower groups.

ObjectiveThe Article of Memorandum of HUDCO stipulates the Major Objective of HUDCO as under:

1. To provide long term finance for construction of houses for residential purposes or finance or undertake housing  and urban development programmes in the country.

2. To finance or undertake, wholly or partly, the setting up of new or satellite town.

3. To subscribe to the debentures and bonds to be issued by the State Housing (and or Urban Development) Boards, Improvement Trusts, Development Authorities etc., specifically for the purpose of financing housing and urban development programmes.  

4. To finance or undertake the setting up of industrial enterprises of building material.

5. To administer the moneys received, from time to time, from the Government of India and other sources as grants or otherwise for the purposes of financing or undertaking housing and urban development programmes in the country.

6. To promote, establish, assist, collaborate and provide consultancy services for the projects of designing and  planning of works relating to Housing and Urban Development programmes in India and abroad.

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HUDCO - A LEADER IN SUSTAINABLE HABITAT AND URBAN DEVELOPMENT:

Urbanization is a natural consequence of socio-economic changes that take place as a country develops. At the same time, urbanization helps to contribute to the growth process at large. This manifests in the increasing contribution of urban sector to national income. The positive role of urbanization is often over-shadowed by the deterioration evident in the physical environment and quality of life in the urban areas caused by widening gap between demand and supply of essential services and infrastructure. The challenge of reorienting the urbanization process, thus, lies in overcoming the infrastructural deficiencies and taking the best advantage of economic momentum inherent in urbanization. Growing urbanization also holds tremendous potential, as engines of economic and social development, creating jobs and generating wealth through economies of scale. It needs to be sustained and augmented through high urban productivity for country's progress. National economic growth and poverty reduction efforts will be increasingly determined by the development of these cities and towns. For Indian cities to become growth oriented and productive, it is essential to achieve a world class urban system. This in turn depends on attaining efficiency and equity in the delivery and financing of housing and urban infrastructure. Urban areas in our country are characterized by severe shortage of affordable housing and basic services like potable water, well laid out drainage system, sewerage network, sanitation facilities, electricity, roads and appropriate solid waste disposal system. Rapid urbanization is adding further pressure on the existing infrastructure. The widening gap between the rich and poor calls for a strong strategy towards inclusive cities. The broad elements of the approach of Government of India to tackle the problem of housing the poor include special programmes with subsidy for the poor and vulnerable groups, and improving the access to cheaper funds for housing and social infrastructure. HUDCO, for achieving the overall objective of "Affordable Housing for All" with sustainable development, is committed to extend its helping hand to the development of inclusive cities in the country.

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HUDCO is a multi-dimensional and multi-functional organization addressing almost the entire gamut of habitat issues in the country. HUDCO stands out in the burgeoning housing finance industry, for its focus on the low income groups and basic infrastructure provision. Towards supporting housing for the weaker sections of the society, HUDCO follows a policy of lower interest rate, a larger portion of the unit cost as loan and a longer repayment period for this sector. It continues to emphasize on sectors, which are more socially relevant rather than only on commercially viable and profitable sectors. It has played a stellar role in the implementation of National Urban Housing & Habitat Policy and also various other housing programmes of the Government of India and supports national level developmentInitiatives across the country to promote sustainable growth of cities. In response to the changing environment, HUDCO, enjoys considerable experience and expertise in appraising infrastructure projects and financing them at competitive rates. It acts as an enabler and facilitator by developing suitable financial instruments for promotion of housing for the

EWS/LIG groups serviced by basic amenities. HUDCO is also supporting provision ofinfrastructure facilities such as water, drainage, sanitation, sewerage, solid waste disposal, power supply, roads and transport.

MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN HUDCO AND MINISTRY OF HOUSING AND URBAN POVERTY ALLEVIATION

HUDCO has recorded impressive results and has surpassed the MoU (Memorandum of Understanding) targets for the year 2010-11 on various profitability, sanctions and recovery parameters. HUDCO expects to have an improvement in its MoU score over the previous year.Further, HUDCO and the Ministry of Housing and Urban Poverty Alleviation have entered into aMemorandum of Understanding (MoU) for the year 2011-12 in regard to various operational performance parameters. The MoU envisages significant growth in the operations of HUDCO in the Housing and Urban Development sector with sanctions of more than Rs. 20,000 crore and release of Rs. 6,000 crore during the year. Towards facilitating HUDCO in achieving its projected growth, the Ministry would support HUDCO to increase its credit worthiness and enable it to achieve its social objective by providing the necessary policy support. The MoU entails the Ministry's support to HUDCO in mobilizing resources at lower costs.

STRENGTH AND WEAKNESS19

HUDCO is a reputed techno-financial institution of 40 years with established brand name in Housing and Infrastructure Sector. The Corporation has a commendable track record in dealing with a variety of housing, real estate and infrastructure projects and has a long history of outstanding performance. In the process, the Corporation has gained extensive experience and expertise in different aspects of such type of projects. Starting from financing conventional urban infrastructure projects, HUDCO has also added other type of infrastructure projects in its portfolio. This rich legacy of experience over the years is the main strength of HUDCO. Further, with the nationwide network in all States and UTs,the Corporation has a wide coverage of all stakeholders including Government, public sector, private sector, NGO's and individuals, with decentralized operations. It has a wide range of skilled and technical manpower, broad spectrum of operations and range of products catering to every section of housing and infrastructure. A separate and well-equipped set-up has been established at HSMI for research and training to impart skill up gradation/capacity building for in-house as well as borrowing agencies' professionals with latest practices and innovative ideas for project implementation. This initiative of HSMI is another strength of HUDCO. HUDCO has been awarded ISO 9001:2008 certification by Indian Registrar of Quality System (IRQS), which has accreditation with the National Accreditation Board for Certification Bodies (NABCB) and RVA (an International Accreditation Body). HUDCO has been appreciated for quality management for all of its activities through systematic procedures, covering projects and retail financing services, resource mobilization for funding, consultancy, joint venture, training, research and networking in human settlement planning and management. The business opportunities in the housing and infrastructure sector have triggered intense competition amongst the players. HUDCO faces substantial challenges in terms of resource mobilization and financing options from the existing and the new players. In a market driven economy, the key to tackle such challenges depends on adaptability of the product and processes, technological up gradation etc. Further, the real estate and infrastructure projects are inherently risky as they are characterized by huge capital investment, long gestation and payback periods and sensitivity to various domestic and international economic factors.

Emerging Issues and Challenges Cities have been at the heart of country’s economic success. Urban India accounted for over

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62% of the country’s GDP in 2009-10 and this figure is expected to rise to about 75% by 2030. Thus, cities will matter more in the future as they steer economic growth. Today, more than half of the world is urban. In India, urban population has grown from 286 million in 2001 to 377 million in 2011, accounting for over 31% of the country’s population and is expected to reach 600 million by 2031. This scenario poses huge challenges as well as opportunities for HUDCO in terms of provision of housing to the masses and related infrastructure. As per 2011 Census, 17.4% of urban households live in slums. This huge population is also contributing significantly to the growth of our economy. Therefore, the ‘urbanization dividend’ can be reaped only if the cities are evolved into inclusive centres of growth. Toward the same, 11th as well as 12th Five Year Plans have emphasized on inclusiveness theme. Similarly in the urban infrastructure arena, there exists a huge physical and financial shortfall. The financial shortfall is estimated at around ` 40 lakh crore by the Isher Ahluwalia Committee. Therefore, the city/town level civic infrastructure also provides significant opportunity and challenge to HUDCO. The Government of India has always set high expectations from HUDCO and has been supporting HUDCO in many ways. HUDCO has played a significant role in the implementation of Action Plan Schemes of government of India such as JNNURM, SJSRY, RAY, ISHUP etc. The Credit Risk guarantee Scheme (CRgS) for the housing loans upto ` 5 lakh for catering to the needs of the urban poor is a major credit enhancement measure taken by the MoHUPA through NHB. HUDCO is expected to play a lead role in giving the poor access to housing finance. HUDCO has stabilized itself and consolidated its strengths in the last two years and is now poised to look beyond its routine business targets and aim for a quantum jump.

Towards the same, HUDCO has set five goals under ‘MISSION FIVE ONES’: i) One Million Houses per year,ii) One lakh crore cumulative releases, iii) One thousand crore profit after tax, iv) One hundred urban local bodies to be assisted per year and v) One percent reduction in NPA per year.

The employees have been inspired to work towards these larger goals.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS

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India's fast growing economy is propelling rapid urbanization which in turn is being fostered by an enabling policy framework. While economic growth is providing impetus to the housing and infrastructure sectors, the population growth is adding to the demand side on a continuous basis. The overall scenario thus provides a vast opportunity for HUDCO in terms of business generation. The quantum of housing and infrastructure shortage in the country presents a huge gap to be filled in this sector. The urban housing shortage in the country is currently estimated at a whopping 26.53 million units which would require an investment of over Rs. 3,61,300 crore as per the 11th plan estimates. Further, as per preliminary assessment by the Planning Commission, the infrastructure sector needs nearly Rs. 41,00,000 crore investment in the 12th Plan period. Thus, there are immense opportunities for financing the key sectors of the economy such as housing and real estate development, roads and highways, power, water supply, ports, tourism infrastructure, etc. Due to a long gestation period and large capital outlay, the risk level in housing and infrastructure projects is high. The various risks involved are credit risk, market risk, liquidity risk, regulatory restriction, forex risk, operational risk and ability to maintain its recovery performance and assets quality. The recent global experiences have shown that these sectors are often characterized by irrational exuberance and prone to bubble formations. Hence careful due diligence needs to be ensured while evaluating the financing proposals involving such projects.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year a non-lapsable budget of 9.45 crore (1.5% of Profit after Tax for the year 2011-12) has been provided for the CSR activities. In line with the thrust areas identified in the HUDCO CSR Policy, HUDCO has sanctioned CSR assistance of ` 16.84 crore for 27 proposals and released an amount of ` 9.83 crore for implementation of various proposals. Some of the important projects under CSR are as follows: Construction of Night Shelters in various states/cities, Construction of Community Pay and Use Toilets in various States/Cities, installation of Pre-Fabricated Zero Discharge Toilet Systems (ZDTS) during Kumbh Mela at Triveni Sangam, Allahabad through IIT Kanpur; construction of Skill Upgradation Centres in various cities viz. Bangalore, Ongole and warangal in Andhra Pradesh, Rajkot in Gujarat and Puri in Odisha. HUDCO has also provided support to govt. of Sikkim for taking up reconstruction of 15 houses along with strengthening of the retaining wall at Singtam, Sikkim damaged during the earthquake.

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HUDCO has sanctioned the CSR assistance to Construction Industry Development Council (CIDC) for taking up training programme of 400 beneficiaries in the states of Odisha and Rajasthan and for slum women in Kerala through KUDUMBSHREE, a state level agency engaged in implementation of slum development programmes. HUDCO has also extended CSR support to Differently Abled persons by providing Disability aids & Tool kits through ALIMCO and National Handicapped Development Finance Corporation. HUDCO also extended support for Rejuvenation of Building Centres in collaboration with the Building Material Technology Promotion Council (BMPTC) for taking up the projects/pilot studies identified by the Committee constituted for revival of building centres set up by Govt. of India under National Network of Building Centres.

THE ORGANISATIONAL STRUCTURE

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FINANCE & ACCOUNTS

CORPORATE PLANNING

DESIGN & DEVELOPMN

T WING

URBAN AND

REGIONAL PLANNIG

ECONOMICS

WING

MGMT SERVICES

WING

RESOURCE

MOBALISATION

ASSET MANAGEME

NT

HUMAN RESOURCE

WING

HUDCO

PROGRAMMESIn order to realize the objectives for which it was established, HUDCO has implemented a

variety of schemes for shelter and services, thereby improving the living conditions of the

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BOARD OF DIRECTORS

Mr. M.Ravi Kant (Chairman & managing director)

Mr. K.B.S.Sindhu {Director & Jt. Secretary (Housing)}

Ms. Jhanga Tripathi (Director & Jt. Secretary & Financial advisor)

Mr Ihvi Ani Kumar (Director Finance )

T Prabakaran (Director Finance)

Mr. N.L.Manjukar (Director Corporate Planning)

Mr. Harish Kumar Shami (Company Secretary)

people. Apart from financing housing schemes, HUDCO is also contributing to improve the

quality of life by augmenting basic community facilities and infrastructural services.

Projects involving self help by the beneficiaries are promoted by encouraging sites and services

scheme, core housing, skeletal housing, shelter up gradation and so forth. In order to provide

basic facilities in the existing houses where adequate sanitary disposal system are not

available, financial assistance for basic sanitation schemes is being extended on liberalized

items. HUDCO extends assistance benefiting the masses in urban and rural areas under a broad

spectrum of programmes as listed below:

HOUSING

Urban Housing

Rural Housing

Staff Rental Housing

Repairs and Renewals

Shelter and Sanitation facilities for foot path dwellers in Urban Areas (Night

Shelter and Pay and Use toilets)

Working Women Ownership Condominium Housing

Housing through Private Builders/Joint Sector

Individual Housing Loans through ‘HUDCO Niwas’

Land Acquisition

INFRASTRUCTURE

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Integrated Land Acquisition and Development

Environment Improvement of Slums

Utility Infrastructure

Social Infrastructure

Economic and Commercial Infrastructure

BUILDING TECHNOLOGY

Building Centres for Technology Transfer at the Grass- roots

Building Material Industries

CONSULTANCY SERVICES

Consultancy in Housing, Urban Development and Infrastructure

RESEARCH AND TRAINING

Capacity Building and Technical Assistance to all Borrowing agencies,

Research Training and Networking in human Settlement Planning and

Management.

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Future Outlook:

HUDCO has been the principal Government body, which has been focusing on financing EWS

and LIG housing over the years. HUDCO has been able to meet vital need and create a niche in

the area of social development. HUDCO plans to explore further opportunities in related sectors

for sustainable growth, which in turn will help it to further support its social objectives. In

addition, HUDCO also plans to leverage upcoming opportunities in integrated townships and

municipal infrastructure especially through JNNURM.

To enhance focus on identified growth sectors, dedicated sector and domain teams, as the

strategic business units have been put in place. In the field of information technology,

implementation of integrated ERP solutions is also underway to enable HUDCO to be

competitive and to be able to respond to the business requirements more efficiently

28

CHAPTER-3JOB DESCRIPTION

AND FUNCTIONAL PROFILE

29

APPROACH TO THE PROBLEM

Understanding Rating Criteria for Financial InstitutionsA Bond issue should be rated by rating agencies recognized by Reserve Bank of India once

before the issue and annually during the tenure of the issue, the first rating exercise is called

Initial rating and the subsequent exercises are called surveillance rating. During the surveillance

rating an agency can upgrade or downgrade the rating of the instrument. Before implementation

of BASEL II only some specific instrument needs to be rated but after BASEL II some more

instruments like bank loans etc. needs to be rated. Currently RBI has recognized four rating

agencies namely CRISIL, CARE, ICRA and FITCH. Every rating agency has its own set of

criteria for the rating purpose but all of them more or less analyze the same thing like liquidity,

solvency, profitability, Operational efficiency, macroeconomic environment etc.

For rating of a Financial Institution, a rating exercise involves the review of overall economy,

financial sector and banking industry and the analysis of the company with respect to its peers

and the industry average. Rating process also closely monitors the changing trends and its impact

on the company while doing the rating exercise. Criteria for rating include both quantitative as

well as qualitative factors. Some of the most important criteria are as follow.

Market Position : Size and market position of an entity is one of the criteria, which get weight age during rating

exercise. A large size enables an entity to withstand systematic shocks and determines the

systematic support an entity can obtain when required. At the same time a niche strategy of

smaller company`s against the scale advantage of the larger company is carefully examined.

30

Capital Adequacy: An entity`s capital provides it with necessary cushion to withstand credit risk and other risk in its

business. So capital adequacy level and its sustainability over the medium to long term is one of

the important criteria. Capital adequacy analysis encompasses the following factors. Capital

Adequacy ratio is defined as the ratio of pure capital consists of Tier – 1 capital and Tier – 2

capitals to risk weighted asset of the organization.

Size of capital: The absolute size of the capital imparts flexibility to a financial institution to

withstand shocks. Therefore an entity with high absolute capital is viewed favourably.

Quality of capital: The proportion of Tier -1 or core capital (includes equity share capital,

equity share premium, statutory reserves, general reserves, special reserve and capital reserves

other than revaluation reserves) is the primary indicator of the quality of a Financial institution`s

capital. Tier- 2 capitals consists of subordinated debt, revaluation reserves, Provision for

standard assets, special reserve (swap) and investment reserve The level of Tier-1 capital is given

primary importance when assigning rating on the capital adequacy parameter.

Sustainability of capital ratios and flexibility to raise Tier -1 and Hybrid capital: An entity

can enhance its Tier-1 Capital base either through internal accruals or by raising fresh equity

capital or by raising hybrid capital. So rating process evaluates the rated entities ability to access

the capital market to meet its Tier -1 capital needs and its ability to service the increased capital

base. A Financial Institution`s ability to support increased asset base trough earnings is an

important parameter in assessing the sustainability of its capital adequacy. An entity that is able

to sustain the asset through internal generation without impairing capital adequacy is viewed

favourable.

Growth plans: Capital adequacy of a Financial Institution would be regarded as unsustainable

if entity pursues high-growth strategy.

Resource raising ability : Resource position of a Financial Institution is analysed in terms of its ability to maintain low cost

and stable resource base. The following issues are considered while analyzing the resources

position of a financial institution.

31

Diversity of investor base: Given that FIs are predominantly wholesale funded, the diversity of

the investor population (both domestic and international) does mitigate an FI`s risk profile to

some extent. FIs that are dependent on a few investors are viewed less favourable than those

have a large investor base.

Funding mix and cost of fund: Traditionally FIs enjoyed concessional funding from

Government of India (GOI) in form of SLR bond or subsidized loans. This facility has been

progressively withdrawn and FIs have been increasingly accessing market borrowing over past

few years. FIs that still carry a significant proportion of concessional funds on their books will

tend to enjoy a cost of fund advantage over near term.

The funding mix: The funding mix between domestic and foreign currency funding is also

examined to determine an FI`s overall risk profile. FIs that tend to have higher proportion of

foreign currency funding carry the risk of a foreign currency borrower defaulting on payment

obligations and thus, exposing FI to increased currency risk. This risk assumes greater

significance at time when the economy is slowing down or there are a larger number of corporate

defaults. Any sovereign support to cover adverse fluctuation in foreign exchange rate will be

viewed favourably in the analysis of the entity`s resource profile.

Retail penetration and tax benefit: Some leading FIs regularly raise bonds and deposits from

retail investors. These funds impart stability to the funding mix and the trend in raising retail

resources is favourably factored. Any sustainable form of tax related or regulatory benefit that

are accorded by the sovereign to the entity`s bond programme will influence entity`s resource

profile favourably.

Asset Quality :

Asset quality is a measure of its ability to manage credit risk. Asset quality is analysed on the

following parameters.

Geographical diversity and diversity across industries: Due to the diversity of asset, risk is

not dependent on the particular industry or regional economic condition so diversified asset base

is viewed favorably.

32

Client profile of corporate asset portfolio: The credit of a bank`s corporate portfolio is an

important input in analyzing asset quality. Generally rating process analyses top 100 or 200

corporate exposures in the asset portfolio of the banks to make judgment about portfolio quality.

The ability of a FI to attract clients with better credit quality is an important indicator of its own

future credit quality.

Quality of non-industrial lending: Study of some obligation towards lending money to priority

sector. The credit quality of the asset portfolio is also indicated by segment wise NPA level of

the portfolio, revealing the performance in each sector. Quality of retail consumer credit growth,

the underwriting standards and recovery mechanism are good indicators of the asset quality in

retail segment.

Weak asset level: The asset quality of a FI depends not only on the quality of its clients but also

on its ability to manage asset portfolio. Weak asset levels are an indicator of the inherent quality

of the entity`s asset portfolio and thus its credit appraisal capabilities. The proportion of earning

asset and the potential credit loss would have a bearing on the bank`s future earning capability.

Movement of provisions and write–off: FI`s follow a practice of writing off a large portion of

their bad loans in order to clean up their balance sheets. The present weak asset numbers are thus

are not a true indicator of inherent credit quality of FI`s asset portfolio. Average provisioning

including write-offs, over a five-year time frame is an indicator of the level of cleaning up done

by FI over a period of time. This average provisioning level and its movement is an indicator of

the portfolio credit risk and expected write-offs and provisioning, which would further effect the

bank`s earnings capabilities.

Growth in advances: high growth in the financial sector brings the risk associated with the

establishment of collection system, tracking of asset quality and lack of seasoning of lending

portfolio. Entity with high growth rate should be analysed more closely to understand the nature

of growth, the reason for it and its implications for asset quality. An entity that has grown by

attracting good quality clients would be viewed favourably than that has grown just by increasing

the geographical presence or diluting the credit criteria.

33

Management and system evaluation:

Quality of management is an important differentiating factor in the future performance of a FI.

The management is evaluated on following parameters.

Goals and strategy: Future goals and strategies are evaluated to form a view on its

management`s vision. The institutions ability to adapt to the changing environments and manage

credit and market risk, especially in the scenario of increasing deregulation of financial markets,

assumes critical importance. Policy with regards to diversification, asset growth, maintenance of

capital, provisioning and liquidity levels are also considered while evaluating management.

Systems and monitoring: Credit appraisal systems and the systems for managing and

controlling credit and market risk at a portfolio level. Risk monitoring system and periodicity

and quality of monitoring is also taken in to consideration. Hoe efficient is MIS reporting in the

organization also gets a weight age in rating process.

Appetite for risk: High-risk appetite typically reflects in higher volatility in earnings in both the

fund based and fee businesses. A management with a higher propensity to take on risk is viewed

cautiously.

Competence and integrity: Assessment of the competence and integrity levels of management

is a key analytical driver of management evaluation. This delves in to past track record of the

management to identify positive and negative attributes of both these areas.

Earning potential:

Earnings are analysed on the basis of the level, diversity and stability of the earnings.

Level of earning: The level of earnings as measured by the gross interest spread and ratio of net

interest margin to the total asset deployed. The level of earning provides FIs with a cushion for

its debt servicing and also increases its ability to cover its asset risk. Total asset employed is

defined as balance sheet as per annual report plus current liabilities minus sum of deferred tax

liabilities and misc. expenses not written off.

Volatility: Earning of FIs can be significantly affected due to volatility in interest rates. Thus

trend in profitability at gross profit levels over the past year is examined to form a view on

sustainability of earnings.

Diversity of income sources: Diversity of income sources is an important input in analysing the

stability of earnings. Diversity in fund-based income is achieved by focusing on different

34

borrower segments such as industries, trade and retail. Fee income provides cushion to

profitability especially in times of pressure on interest spread.

Income Stream: Interest income stream is also analysed. Relying on short-term non-repetitive

sources is viewed less favourable than with long-term credit relationship with companies.

Efficiency Measures: Level and trends in operating expenses and degree of automation in FIs,

salary expenses and total non-interest expenses as a proportion of average asset.

Liquidity /Asset liability management :

Asset liability maturity profile is analysed to form an opinion on the liquidity and interest rate

risks.

Liquidity risk: An FI`s liquidity position is a function of its management`s policy of

maintaining treasury portfolios to meet asset and liability side liquidity demands. Specific

liquidity parameters are as follows.

Liquid asset divided by Total asset: For this we look at percentage of sovereign investments,

liquid short-term fixed income instruments in an entity`s books to its total assets.

Interest rate risk: Entity`s asset liability maturity profile is analysed to judge the level of

interest rate risk carried by it.

Government Support: Government support for specialized entities in the financial sector, which have a policy role to

play in the national economy, is viewed positively. Government support gives an added

assurance for the interest and principle payment to the debtors.

35

SWOT ANALYSIS OF HUDCO

Strength : It provides financial assistance as well as technical assistance to its clients

HUDCO is ISO 9001:2000 certified company, which would lead it towards

rewarding journey for sustainable competitiveness in terms of enhancement of

quality services, cost reduction, environmental compliance

Brand power as HUDCO being a government ownership enjoys the implicit

sovereign support

Comfortable liquidity position and financial flexibility

Weakness: Banks have an advantage of access to cheaper funds in the form of demand deposits,

which cannot be acquired by HUDCO and are in direct competition with HUDCO.

Unable to manage growth to new sectors under its private sector portfolio, where it has

limited track record.

Opportunities : HUDCO invests an estimated amount for the alleviation of the total requirement of

housing. The growth in living standards, increase in disposable income etc are some other

invincible factors, which indicate that housing finance industry has bright prospects

ahead.

Tax sops, provided by the government of India, are a significant step towards upholding

the future prospects of this industry.

36

Threats : It fails to execute the motive of financing housing sector due to some unavoidable

constituents such as the problems of credit risks, recovery, volatile cash flow of

the people, etc.

HUDCO remains at a disadvantage vis-à-vis banks on cost of funds.

Chapter 4

37

LEARNING EXPERIENCE AND THE INSIGHT GAINED

RESEARCH METHODOLOGY

Rationale behind the projectHUDCO is in the business of borrowing fund at the lower rate and lending it at higher rate, by

this mean it makes profit. HUDCO raises the largest portion of the fund (Approx 39 %) through

bonds, so the borrowing cost of the bond makes the biggest impact on the profit of HUDCO.

Initially when only HUDCO was there in the housing and infrastructure sector the interest rate

spread was high so the impact of the borrowing cost was less visible on the profit, but after

liberalization when all the banks and FIs entered in this sector the profit margin got squeezed so

a little increase in the borrowing cost also has a big impact on the profit.

There is a difference between yield rate of “AAA” rated corporate bond and “AA+” and “AA”

corporate bonds. Indicative quotes appearing on Reuters Screen as on May 26, 2009.

Maturity/ Ratting 1 2 3 4 5 6 7

AAA 6.15 6.68 7.3 7.48 7.99 8.18 8.43

38

AA+ 6.33 6.86 7.48 7.66 8.17 8.36 8.61

AA 6.51 7.04 7.66 7.84 8.35 8.54 8.79

If we look at the yield of corporate bonds with every rating decrease the yield is increasing by 18

basis points to compensate the risk associated with the bond.

Since the largest portion of the fund is raised through bond and HUDCO`s bond is rated “AA+”

and most of its competitors bond is rated “AAA”. So this gives an opportunity to dig out the root

cause that is responsible for the lower rating of HUDCO`s bond and suggest the solution to these

problems.

Methodology For analyzing the reasons for the HUDCO`s lower bond rating, the first thing that is required is

to understand the criteria adopted by rating agencies for rating any FI`s bond. After

understanding that criteria we need do analyze the HUDCO`s performance and portfolio based

on those criteria. After HUDCO`s analysis we need a reference level to compare these

performances. Since HUDCO`s bond has got the highest rating of “AA+” by CARE, We need to

identify an organization whose portfolio is similar to HUDCO`s but the bond of that organization

is rated “AAA”. Once the organization is identified we analyze the organization based on the

rating criteria. Finally we will compare all the quantitative as well as qualitative criteria and try

to find out the reason for HUDCO`s lower bond rating. In a nutshell the following thing will be

adopted

Understand the criteria for rating, by rating agencies: The first step in this project will be

to understand the rating criteria by the rating agencies for Financial Institutions.

Analyze the performance of HUDCO based on those criteria: Once the criteria is clear on

which rating agencies rate a Financial institution, analysis of HUDCO will be done on

those criteria.

Select an organization with similar portfolio as of HUDCO and having “AAA” rating for

their bond: After HUDCO`s analysis the next step will be to identify an organization

whose profile is similar to that of HUDCO and their debt instrument has got the rating of

“AAA”.

39

Analyze that on the basis of the rating criteria: Once the selection of organization is done

that organization will also be rated on those criteria.

Compare the performance of the HUDCO and the organization to find out the problem

with HUDCO: After the analysis of both the organizations on the same criteria we can

compare the performances and find out the weak points of HUDCO.

Suggest the solution for the problem: After finding out the weak points of HUDCO the

root cause analysis will be done and finally suggestions will be given for HUDCO so that

the debt instrument rating of HUDCO can improve.

OBJECTIVE OF THE STUDY

TO ANALYSE THE CAUSES BEHIND THE LOW BOND RATING OF HUDCO I.E

AA+.

TO ANALYSE FACTORS OF HIGHER RATINGS TO THE COMPETITORS LIKE

REC.

SCOPE OF THE STUDY

RISK ASPECTS OF THE COMPANY

INTERRELATION OF COMPANIES

ANALYSIS AND INTERPRETATION OF PRINT MEDIA INDUSTRY, BUSINESS

AND FINANCIAL PARAMETERS.

DATA-COLLECTION METHODS

40

The task of data collection begins after a research problem has been defined and research

design has been chalked out. The factors like availability of time, money, human involvement

the foremost sampling

Units affect the reliability of the data collection.

There are mainly two types of data:

1. Primary Data

2. Secondary Data

PRIMARY DATA are those data, which are collected fresh and for the first time. The

methods of collecting primary data are Observation' Method, Interview Method,

Questionnaire Method and Schedules.

SECONDARY DATA are those data, which have been already collected by someone

else have been passed through statistical process & may have been used, in previous

researches.

SOURCE OF DATA

The secondary sources of data like the profit and loss account, balance sheet, etc. were

supplied by the finance department. Using this data, ratios were calculated and analyzed.

These data and other financial highlights for the past five years were used to calculate the

storage periods of the components, which make up the operating cycle.

The secondary sources of data are:

41

Annual reports

Websites

Various publications

Magazines

ANALYSIS OF HUDCO DATA

HUDCO is a financial institution whose main business is to provide loan to housing and

infrastructure sector. Recently HUDCO has diversified its business to other sectors also,

now it is actively involved in power sector and personal housing sector loans.

Operational Analysis

Advance Portfolio:

Asset for any financial institution is its advance portfolio. How prudent it is in lending loan

and how its advances are growing with clients having good credit profile carries a great

weight age for its operational performance.

HUDCO has total Advance portfolio of Rs 23974.00 Crore in Financial Year 2012-13 as

compared to Rs 20511.00 Crore in Financial Year 2011-12. During the year 2012-13,

HUDCO has sanctioned 140 schemes exclusively in Housing sectors and 96.82% loan has

been provided to EWG/LIG categories and fulfilled its commitment supporting the housing

sector in the country, especially the weaker & economically downtrodden section of the

society. Further the Urban Infrastructure intends to emphasis on the quality of life . It

provided financial assistance in various sectors such as water supply, Road & Transport,

42

Sewerage, Power sector, Industrial infrastructure and in various miscellaneous projects.

The details of loan sanctioned sector-wise in various projects is as follows:

( Rs In Crors )

S.No Portfolio Amount

1 Housing 7637

2 Water Supply 3088

3 Road & Transport 5989

4 Sewerage/Drainage 972

5 Power Sector 1750

6 Industrial Infrastructure 3030

7 Other Miscellaneous 1508

The maximum exposure of the HUDCO`s portfolio is towards Urban infrastructure

accounting 68 % of its total portfolio; exposure to housing is moderate with 32 % of its

total portfolio. Out of this 32% ( 25% in Housing and 7% in Hudco Niwas) .

43

When we look at the portfolio of HUDCO by categorizing it in government as well as in

non-government exposure. The exposure to private and government sector in its portfolio

is heavily weighted toward Government sector approximately 75% towards government

sector & 25% to private sector..

44

The detail break up of Government & Private is as depicted below:

Housing UIF Hudco Niwas

Govt. Private Govt. Private Govt. Private

Credit

Portfolio

4585.03 1408.47 12150.12 4152.20 1304.29 373.89

% 76.50 23.50 74.52 25.47 77.71 22.28

Loans Sanctioned and Released:

During the year 2012-13 Company has sanctioned total of Rs 23974 crore of loans which

has grown by 14 % compare to last year of 20511 crore. The released amount in financial

year 2012-13 is Rs 6079 crore as compared to Rs 6905 crore in financial year 2011-12

showing a significant drop of 12% as compared to last year by the company.

45

Resource Profile: HUDCO has a diverse resource profile. It has been mobilizing resources

from various sources like banks, Financial Institutions, Capital Market, International

Bilateral/Multilateral Organizations, Trusts and individuals etc. The borrowing program

typically includes long term and short term loans / lines of credit, public deposits,

debentures/bonds, Commercial paper etc. Bonds account for 39% of HUDCO`s resources,

around 37% is accounted by rupee term loans from banks. Public deposit scheme accounts

for 8% of total borrowings. The remaining 16% is raised through international loans,

FCNR Loans, Loans from FIs etc.

Cost of Borrowing: HUDCO’s cost of borrowing has increased in FY 2012-13 to 8.7%

compared to the previous year cost of borrowing to 8.5%. The income of the HUDCO

46

largely depends on the cost of borrowing. The cost of borrowing is rising as ancillary

charges like brokerage charges, arranger’s fees, stamp duty etc. have increased.

Non-Performing Asset: HUDCO has made good effort to resolve the NPAs; this is reflected

by the fact that the NPA for FY 2012-13 was 5.50% where in financial year 2011-12 it was

5.44%. Although HUDCO has expanded its business more towards private sectors in

which it has got very bad track record of recover, it has improved the NPA. Net NPA for

2012-13 is lower at 4.03% compared to the previous year Net NPA of 4.11 %.

47

Financial Analysis:

Profitability: For profitability analysis we have mainly used ratio analysis. With the help of

balance sheet and ratios we have computed some ratio that is relevant for the Financial

Institutions. The ratios for the HUDCO are as follows:

Key Financials

TABLE-3

S.NO Name of Ratio’s 31-Mar-2013 31-Mar-2012

1 Current Ratio=CA/CL 0.81:1 1.04:1

2 Liquid Ratio= LA/LL 1.31:1 1.21:1

3 Quick Ratio =QA/QL 0.21:1 0.49:1

4 Asset to Proprietary Ratio =Total 7.50:1 7.93:1

48

Asset/Shareholder Fund

5 Debt Equity Ratio =Long Term

Debt/Shareholder Equity

2.08:1 2.28:1

6 Gross Profit Ratio =GP/NP*100 151.55:1 149.12:1

7 Net Profit Ratio =NP/Net Sales*100 23.96:1 22.68:1

8 Operating Ratio =Cost of Goods Sold+

Operating Expenses/Net Sales *100

63.68:1 77.24:1

9 Return on Capital Employed =Net Profit

After Tax/Net Capital Employed*100

10.75:1 10.52:1

10 Return on Total Assets =Net Profit After

Tax but before interest/Total Asset*100

1.43:1 1.32:1

Here some ration need explanation like Interest spread of any Financial Institution is a

very good measure of its operating efficiency and profitability.

It is defined as

Interest Spread = (Interest Income / Average interest bearing assets) – (Interest

expenses / Average interest bearing liabilities).

All the profitability ratios for HUDCO have improved from the past year. The increase in

the Interest Spread is about 216.12 % in FY 2007-08 compared to the FY 2006-07.

Selecting an organization:

For this analysis Rural Electrification Corporation Limited has been selected. The reasons

for selecting REC for comparative analysis are as follow.

HUDCO is a public sector unit 100% owned by Government of India set up in 1961.

Before 12th march 2008 REC was also 100 % owned by Government of India

presently GOI owns 66.80% of its share and 28.54% of its share are with Financial

49

Institution . Although REC has issued its equity but that is a very recent

development that will not affect the analysis in a major way.

HUDCO and REC both were established almost at the same time by government of

India. Both the organizations are strategically important for Government of India.

HUDCO acts as nodal agency for Housing and urban development sector, similarly

REC acts as nodal agency for electrification.

The client profile of both HUDCO and REC is very similar. Their main customers

for both the organizations are the state level agencies. So the credit profile as well as

the securities for the advances as similar for both the organizations.

A major part of the advances of HUDCO as well as REC is backed by government

guarantees or government mortgages. That gives the surety for the recovery of the

advances.

Both the Organization HUDCO as well as REC is concentrated in a specific sector.

HUDCO`s major focus is in housing and urban development sector where as REC is

concentrated in power generation and distribution sector.

The rating given by almost all the four rating agencies to REC`s bond is “AAA”.

50

Introduction of RECProfile of REC:

REC was set up in July 1969 primarily to finance rural electrification schemes in country to accelerate the pace of rural electrification. REC is majority owned by GOI (Govt. Of India) and is the main vehicle for channeling credit to rural electrification projects, primarily through SEB`s. It provides financial support to State Electricity Boards, State Government Departments and Rural Electric Cooperatives for rural electrification projects as are sponsored by them.

REC provides loan assistance to SEBs/State Power Utilities for investments in rural electrification schemes through its Corporate Office located at New Delhi and 17 field units (Project Offices), which are located in most of the States.

The Project Offices in the States co-ordinate the programmes of REC’s financing with the concerned SEBs/State Power Utilities and facilitate in formulation of schemes, loan sanction and disbursement and implementation of schemes by the concerned SEBs/State Power Utilities. Initially REC was the only organization that uses to finance the rural electrification but due to liberalization, competition has become tough and the profit margin has squeezed or reduced.

In February 2009 REC came up with initial public offer, due to that the GOI (Govt. Of India) stake in REC reduced to 81.82%. Due to its excellent performance REC received the “Navratna” status in May 2009.

Mission: To facilitate availability of electricity for accelerated growth and for enrichment of quality

of life of rural and urban population. To act as a competitive, client-friendly and development oriented organisation for

financing and promoting projects covering power generation, power conservation, power transmission and power distribution network in the country.

Objective: To promote and finance projects which are aimed at integrated system improvement,

power generation, promotion of decentralized and non-conventional energy sources, energy conservation, renovation and maintenance, power distribution with focus on pump set energisation, implementation of Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), a Government of India scheme for rural electricity infrastructure and household electrification.

To expand and diversify into other related areas and activities like financing of decentralized power generation projects, use of new and renewable energy sources, consultancy services, transmission, sub-transmission and distribution systems, renovation, modernization & maintenance etc. for optimization of reliability of power supply to rural and urban areas including remote, hill, desert, tribal, reverie and other difficult/remote areas.

51

ANALYSIS OF REC:REC is a financial institution its main business is to borrow fund at lower cost and lend the

fund at higher cost, by this mean profit is generated. Whatever money it has lent that acts

like asset for the organization.

Operational Analysis:

Advance Portfolio:REC`s advance base in Financial Year 2012-13 registered a 27.33% year on year growth to

Rs. 1,14,529.34 crore as compare to Rs 89,944.11 crore in Financial Year 2011-12 .

By looking at the growth rate of advances we can understand the aggressive growth that

REC is undergoing. The growth in advances is caused by government’s determination for

52

making all the villages of India electrified by near future. Since REC is the nodal agency of

GOI for rural electrification, so the most of the contribution for this cause is from REC.

Loan Sanctioned:The loan sanctioned during the year 2012-13 was Rs.79470.00 crore as compared to Rs.

51296.00 crore during the year 2011-12 & Rs 38563.00 crore in the year 2010-11

The growth rate in loan sanctioned and advance portfolio clearly indicates the motto of

aggressive growth of REC.

Sector Wise Loan Sanction:

53

Loan sanction was highest in the generation sector, which accounted for 60% of the total

loan sanctioned followed by Transmission and distribution and others that accounted for

40 % of the total sanction.

Disbursement:The disbursement during the year also increased to Rs. 40183.06 crore in the year 2012-13 as compared to Rs. 30593.30 crore during the year 2011-12 and Rs 28517.11 crore in 2010-11Along with the advance portfolio the loan sanctioned as well as the disbursement increased in the

similar fashion.

Sector wise disbursement:

54

Transmission and Distribution was the largest business segment, which accounted for 59%

of the total disbursement followed by the generation sector, which accounted for 38 % of

the total disbursement and 3% in others.

Resource Profile:REC has a diversified resource profile, though it’s borrowing are primarily wholesale in

nature. REC funding sources are mainly Banks, Financial Institutions. Life Insurance

Corporation of India (LIC), and capital market instruments such as tax free bonds, taxable

bonds, infrastructure bonds and capital gain bonds under Section 54EC & Government

loans. Capital gains bonds constitute approximately 56 % of REC`s total borrowings.

55

Cost of Borrowing:REC`s overall cost of borrowing continuous rising due to inflation and other factors like

increase in stamp duty, brokerage charges etc. In 2003-04 borrowing cost was 3% to 4%

and in 2012-13, it has increased to 7% to 8.5%. There are also secured and unsecured laons

are taken ,the cost of borrowing of unsecured loan is much higher as compared to loan

taken on secured loan. The company has also able to procure foreign loan of Rs 14944.22

crore at a subsidized rate of 3.5% in financial year 2012-13. The maximum borrowing

comes from about 56% was done through capital gain bonds at the rates between 7.00 to

8.50 percent.

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8.2 Profitability Analysis:

Ratios that are significant for a Financial Institution can help analyze the profitability of

the organization. The significant ratios for a Financial Institution are Interest spread,

Interest margin to average asset deployed and ratios related to non-interest income and

expenses.

For REC the significant ratios are as follows:

TABLE-4

S.NO Name of Ratio’s 31-Mar-2013 31-Mar-2012

1 Current Ratio=CA/CL 0.69:1 1.01:1

2 Liquid Ratio= LA/LL 0.693:1 1.01:1

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3 Quick Ratio =Cash +Marketable

Securities/Quick Liability

1.19:1 1.69:1

4 Asset to Proprietary Ratio =Total

Asset/Shareholder Fund

4.58:1 5.38:1

5 Debt Equity Ratio =Long Term

Debt/Shareholder Equity

5.35:1 5.42:1

6 Gross Profit Ratio =GP/NP*100 135.2:1 134.64:1

7 Net Profit Ratio =NP/Net Sales*100 28.07:1 26.80:1

8 Operating Ratio =Cost of Goods Sold+

Operating Expenses/Net Sales *100

62.02:1 63.96:1

9 Return on Capital Employed =Net Profit

After Tax/Net Capital Employed*100

21.87:1 19.34:1

10 Return on Total Assets =Net Profit After

Tax but before interest/Total Asset*100

3.30:1 3.09:1

Market comparison of HUDCO & REC

S.No HUDCO REC

Content 2012-13 2011-12 2012-13 2011-12

1 EPS 350* 359 38.66 28.53

58

2 Return on Net Worth (%) 10.90 10.29 21.87 19.10

3 Book Value per share N.A N.A 176.76 147.48

4 Debt to Equity ratio(times) 2.08 2.28 6.18 6.18

5 P/E ratio N.A N.A 5.39 7.20

6 Interest Coverage ratio N.A N.A 1.64 1.59

7 Current Market Price (Rs) N.A N.A 243 219

8 Dividend (Rs) N.A N.A 8.25 7.50

9 Dividend paid to Govt. of India (Rs)

150.00 crore

140.00 crore

610.14 crore

510.14 crore

10 Profit after tax 700.56 crore

630.33 crore

3817.62crore

2817.03crore

Face value of HUDCO share is Rs 1000/-

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CHAPTER 5DATA ANALYSIS

Comparative analysis based on the rating criteria

Market Position: Both the organizations act as the nodal agency in its respective sector. So both

the organization HUDCO as well as REC enjoys a strategic position in their respective sector.

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Capital adequacy: Both companies have good capital adequacy ratio means these two

companies are self sufficient to full fill a good portion of their liabilities with the help of pure

capital. HUDCO as well as REC`s capital adequacy ratio is more than the required capital

adequacy ratio set by their respective regulators.

Fund Mix and Cost of fund: The total cost of borrowing for HUDCO in Financial Year 2012-

13 stands around 8.70%. For REC the total cost of borrowing stands around 7%, which is

relatively low. The reason for the low cost of REC was its fund mix, REC`s fund mix consists of

56 % of the bonds in which 42 % are capital gain bonds which are exempted from capital gain

tax by section 54EC. Due to this special exemption these bonds cost something between 5.25 to

5.75 % which makes the overall cost for REC relatively low.

Client Profile and Corporate Asset Portfolio: HUDCO and REC both are Government of

India undertakings. The main customers of both the organisations are state government units.

Although due to this most of the advances are backed by government guarantee and mortgage,

but cases of NPA has risen along with resolution of NPA with delay. So there is not much

difference between HUDCO and REC on these criteria.

Growth in advances: Growth in advances for HUDCO for Financial Year 2012-13 is 16.88%

compared to Financial Year 2011-12. Whereas growth in advances for REC for Financial Year

2012-13 is comparatively big compare to HUDCO, it increased by 27.33% compared to the

Financial Year 2011-12. Since the client portfolio is weak for both the organization so a

moderate growth is good but an extraordinary growth is not good for the organization because

that can lead to high NPA generation.

Appetite for risk: Both the organizations are risk averse. HUDCO seems to be more prudent

than REC. This is reflected by the fact that all the funds that HUDCO could not mobilize are

deposited as fixed deposit in a PSU bank. Whereas REC has got a bit of risk appetite by using

that immobilized fund in a bit risky and high return investment.

Level of earnings: REC`s level of earning is much higher than the HUDCO`s level of earning.

REC is able to generate more income with relatively same operating expenses this means the

operational efficiency of REC is much higher. HUDCO`s Fee based earning is much greater that

the REC, it can help HUDCO to decrease its operating expenses relative to operating income if it

increases its fee based income.

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TABLE-6 (Rs in crore)

HUDCO REC

Net Interest Income 2673 13518

Total Fee Based Income 9.28 NIL

Other Income 56.89 79.81

Total operating expenses 1881 8434

Operating Profits 1042 5164

Profit after tax 700.56 3817.39

Profitability: REC’s profitability is much better than of the HUDCO’s.

TABLE-8

HUDCO REC

Operating Profit / Avg. Total Assets 3.82% 4.32%

Profit Before Tax / Avg. Total Assets 3.91% 4.32%

Profit after Tax / Avg. Total Assets 2.57% 3.19%

Profit after Tax / Net Worth 10.74% 21.85%

The higher profitability ratios are mainly the outcome of the more efficient utilization of the

assets and lower operating costs.

FINAL ASSESMENT MATRIX:

TABLE-9

Criteria HUDCO REC

1 Market Position

Nodal Agency in Housing

and Infrastructure

Nodal Agency in Power

generation and distribution

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2 Capital Adequacy

a. Size of Capital

Lower (Capital Deployed

6513.96 crore)

Higher (Capital deployed

17454.38 crore)

b. Quality of capital Lower Higher

c. Ability to generate Tier

-I Capital Lower Higher (equity in market)

d. Growth plan Higher Higher

3 Cost of the Fund Higher (8.48%) Lower (7%)

4 Asset Quality

a. Diversity across

industry

Higher (also in power

sector) Lower

b. Growth in advances Lower Higher

5 Management

a. Risk Appetite Lower Higher

6 Earning Potential

a. Level of earning

Lower (Net Profit

Rs 700 .56crore)

Higher (Net Profit

Rs 3817.39 crore)

b. Diversity of income

source

Higher (High Fee based

income)

Lower (Low fee based

income)

7 Government Support High High

Based on the final assessment matrix we can clearly see that in most of the criteria REC has got

better score than HUDCO. Now the analysis of the criteria on which HUDCO is weak, needs to

be done and finding out the root cause for that.

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CHAPTER-6

RECOMMENDATIONAND

CONCLUSION

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Suggestions for HUDCO:

THE FOLLOWING MEASURE CAN BE SUGGESTED/RECOMMENDED WHICH CAN

HELP TO HUDCO TO IMPROVE / GAIN THE HIGHER CREDIT RETINGS

Rationalize the resource structure: By looking at the analysis it can be noted that high

dependence on the limited avenues has resulted in higher cost of borrowing for HUDCO. REC

has raised 71 % of the fund through Bonds route and minimized its borrowing cost. At the same

time high dependence on the single route limits the negotiation ability that also leads to high

borrowing cost. HUDCO can also follow that strategy and request with Ministry of Housing and

Urban Poverty Alleviation can negotiate for the special provision for the HUDCO`s bonds under

section 54 EC.

Uniform Disbursements and comprehensive resource plan: In HUDCO resource mapping

very less amount include project lending so it is very difficult to match the cost of borrowing and

plan for a good margin. So if resource mapping includes the project lending it will remove the

uncertainties. Moreover HUDCO disbursements are skewed towards the end of the year when

generally cost of the borrowing increases in the market, this skewed disbursement leads to lower

interest margin. So by removing uncertainties about project lending and smoothen the

disbursement HUDCO can improve its margin.

Emphasis on the internal research and market information: HUDCO needs strengthening of

internal research and market information. It always acts in the market according to the short term

need and never borrows according to the market situation. Financial market is very dynamic in

nature, timings of the opportunities are uncertain. But if focus is given on internal research and

market information uncertainties can be predicted. The prediction can help HUDCO to tap the

opportunity and make long-term policy for the organization.

Unexplored Financial Products: Financial sector is very dynamic in nature. The useful

financial product for the organization changes according to the market condition and the timing.

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HUDCO can explore the possibility to raise the resources from following sources according to

the market condition so that it can minimize the cost of funds.

Commercial Paper for short-term liquidity mismatches.

Repo or G-sec linked loans from banks. Taking the advantage of RBI`s LAF window

banks offer repo related loans to corporate that changes in co-ordination with the repo

rate but BPLRs of the banks are not revised immediately or in co-ordination with the repo

rate change.

IPO – Equity is a cheap source of money for HUDCO. HUDCO should try to launch IPO

at appropriate time so that it can command for a good premium. The premium obtained

can better the financial health of the organization as well as reduce the borrowing cost.

Strengthen Treasury: As we have discussed HUDCO`s resource are not mapped with project

lending fully so HUDCO use to raise some extra fund. But HUDCO treasury is not well

equipped to handle the surplus for two to three months or more, So most of the extra funds are

put as fixed deposits in the bank. Fixed deposits will always lead to lesser returns as it is the bank

who has lend the money and in fixed deposit the bank itself is taking investment so returns are

less. So by having a proper treasury fully devoted for the managing extra funds can results in

better return on the extra funds.

Some of the Instruments that HUDCO can explore to park its extra funds are as follow.

Commercial papers for the short-term investments.

Liquid Funds – Mutual Funds have floated liquid plus schemes, which are essentially

treasury instruments. Under these schemes apart from call money, funds are invested in

money market instruments like G-sec, commercial paper etc. Seven-day return on liquid

plus scheme is around 6.5% to 7%. The instrument is available for one to any number of

days. This gives the flexibility to the treasury manager.

CBLO: “Collateralized Borrowing and Lending Obligation” is popularly known as

CBLO.  It is recently developed money market instrument in India by CCIL. RBI

approves this instrument. CBLO is for the benefit of the entities who have either been

phased out from interbank call money market or have been given restricted participation

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in terms of ceiling on call borrowing and lending transactions and who do not have

access to the call money market.

G-Sec: G-Secs are issued to the market through an auction or on-tap. The details a G-Sec

issuance are announced about 3/4 days in advance. Typically, the RBI holds a G-Sec

issuance every 2/3 weeks and the frequency is usually higher in the first half of the

financial year (April-March). The bonds offered are either new securities or reopening of

earlier issuances. Different types of G-Sec are

Absence of the adequate risk management Services: The return of a business depends on the

risk, so risks are inherent in the business of lending and can be a major source of cost unless

identified in advance, properly measured, monitored and controlled in time. Risks faced by

HUDCO are as follows:

Liquidity RiskLiquidity risk refers to HUDCO’s ability to maintain adequate cash balances to meets its

payment obligations on time at reasonable cost.

Liquidity risk arises on account of maturity mismatch of assets and liabilities. Assets give rise to

cash inflows and liabilities lead to cash outflows. The difference in inflow and outflow in a given

time period constitutes the mismatch.

A negative mismatch is created when:

HUDCO borrows short term and lends long term – usually to gain the positive spread

between long-term interest rates and short-term interest rates, though it is not always

intentional. Investors who are risk sensitive may prefer to invest in short term securities or

in long term securities with put option in their favour.

Expected repayments do not materialize, i.e. the projected cash inflow does not take place,

and hence payment may exceed the receipts. Credit risk finally transforms into liquidity

risk.

Investor exercise put option, and if the cash outflow was not anticipated, payments may

exceed receipts at that point of time.

Borrowing requirements of HUDCO exceed the permitted borrowings for the year, under

its resource mobilization plan.

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A positive mismatch is created when:

HUDCO is unable to deploy available funds immediately – usually when a debt issue is

completed – as a result long term funds are invested in short term instruments (cash inflow

exceeds cash outflow).

Borrowers prepay loans, resulting in excess cash inflow.

Borrowers do not draw loan funds as their drawdown schedule, hence unutilized funds

add to cash flow.

Liquidity risk is twofold in that.

a) HUDCO may not be able to raise funds in the market in time due to that liquidity squeeze.

b) HUDCO may not be able to raise funds at desired cost, particularly when the yield curve

is inverted (short term funds costlier than long term funds). Liquidity risk, if it is

persistent, would manifest as interest rate risk impacting net interest income (NII).

Interest rate riskThe second category of risk that has gained prominence is interest rate risk. Interest rate risk

arises because HUDCO fixes and re-fixes interest rates on its resources and on the assets in

which they are deployed at different times. Changes in interest rates can significantly impact the

net interest income, depending on the extent of mismatch between the times when the interest

rates on asset and liability are reset. Any such mismatches in cash flows (fixed assets or

liabilities) or re-pricing dates (floating assets or liabilities) expose HUDCO’s net interest margin

to variations.

Interest rate risk directly impacts the net interest income (NII) of financial institution.

Interest rate risk arises when there is a gap between interest earning assets and interest bearing

liabilities which are open to re-pricing in a given time period.

Re-pricing takes place:

When lenders reserve the right to change the interest rate during the tenure of the loan.

When interest rate is floating rate linked to a benchmark rate, or

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When a fixed interest loan is repaid, either in full or in installments.

Re-pricing implies that a loan bears a revised market determined rate or market compatible rate

at the discretion of the lender with effect from the re-pricing date. Proceeds of loan repaid may

also be similarly re-lent at current rate of interest.

If re-pricing takes place simultaneously for assets and liabilities in the same bucket, the operating

profit margin (NII) between interest earned and paid will remain intact.

The source of interest rate risk is the gap between rate sensitive assets and rate sensitive

liabilities, which are re-priced in a time bucket. A positive gap (assets>liabilities) in time bucket

implies that assets are re-priced faster than liabilities. In a declining interest rate environment,

positive gap results in a lower NII. The converse is true when the interest rates are rising.

Exchange rate riskA third important category of risk pertains to foreign exchange risk. The risk inherent in running

open foreign exchange positions have become pronounced in recent years owing to the wide

variation in exchange rates. Such risks arise owing to adverse exchange rate movements, which

may affect a bank's open position, either spot or forward, or a combination of the two, in any

individual foreign currency.

Currency mismatches arises when funds are sourced in one currency and applied in another

currency. In case of HUDCO, foreign currency loans availed from banks and multilateral

institutions give rise to exchange risk, as the Loans are utilized for domestic lending and are to

be repaid in rupee income.

Foreign currency loans with floating rate of interest rate carry interest rate risk, as the loan gets

re-priced every 3 months or 6 months based on the benchmark rate. Fixed interest rate also

carries interest rate risk, as effective interest rate in Rupees varies with interest rate differential of

foreign currency and domestic currency.

So to cope with this risk HUDCO must put in place a risk management policy, which would take

care of risk management structure, risk portfolio management, measuring and monitoring risks,

risk optimization and risk management strategy. HUDCO cannot do all this activity by itself so it

can be outsources but at the same time HUDCO should have an active and analytically strong

risk department in the organization.

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Non-Performing Asset: NPAs are the big obstacle in the path of HUDCO`s growth. Due to

inherent weak credit profile of HUDCO`s main customer NPAs are significant. But if we analyze

the reasons for the NPA they are as follow.

Project at the agency level may cause the bottlenecks viz. appraisal from state level

agencies etc.

Lack of the demand for the project on account of recessionary trends. E.g Subhiksha

booked space in every mall but when retail sector encountered the recession they started

cancelling the bookings.

Diversion of the funds by the developers.

By closely analyzing all of the above reasons we can identify the root cause for the NPA and

proper step can be taken so that NPA can be minimized.

One of the suggestions can be to improve the monitoring system. That can reduce the fresh NPA

generation.

Increasing Operating Efficiency: REC mobilizes almost double fund as HUDCO does with

approximately same operating expenses. This suggests that HUDCO`s operating efficiency needs

an improvement. The reason for bad operating efficiency can be.

Cost of fund that we already discussed.

Inadequate flexibility that leads to miss opportunity due to delayed decision-making.

Policies that has not been updated according to the change in competition.

Financial Negotiation Skill is not up to the mark

There is no adequate training for the employees regularly according to the changing

environment.

By analyzing the each and every reason we can narrow down to the root cause of the low

operating efficiency. After identifying the root cause we can focus on removing that so that

operational efficiency of HUDCO improves.

Increasing Fee Based Income:

The main source of fee-based income is management development program and consultancy.

HUDCO being very old organization in its sector has got the ability to provide wide spread of

consultancy in housing and infrastructure sector. The increment of fee-based income is very

important especially in the time of squeezed interest spread. If circumstances and

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macroeconomic environment is not favourable then this fee-based income provides cushion to

the organization.

By increasing fee based income HUDCO can improve its operating efficiency, because for fee

based income employees is needed and the employee`s expenditure is already happening so no

extra expenditure will happen but the total income will improve. So by increasing fee-based

income HUDCO can improve its operational efficiency.

BIBLIOGRAPHY:

1. Financial statement analysis By Thomas R. Robinson.

2. www.crisil.com3. www.recindia.nic.in4. www.hudco.org5. www.bseindia.com

6. www.indiainfoline.com

7. www.equitymaster.com

8. www.moneycontrol.com

9. Indian Readership Survey

10 Annual Reports of the Companies

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