HUDCO to invest ₹14,500 cr in Gujarat; shares surge 9%

Housing and Urban Development Corporation (HUDCO) is planning an investment worth ₹14,500 crore for financing the housing and urban infrastructure projects in Gujarat.

According to the regulatory filing by the state-run PSU, the Gujarat government intends to develop the state by implementing various housing and infrastructure projects. "HUDCO expressed its interest in executing this MoU for an investment up to ₹14,500 crore under financial services sector in the form of financial assistance, as per its objectives and guidelines to the State Government of Gujarat for eligible sector projects through term loan for Infrastructure projects," the company says in a statement.

Following the development, the share price of the company surged as much as 9.39% to hit an intraday high of ₹115.38 apiece on the BSE. The share price of the state-run company closed 8.16% higher at ₹114.08. This is in line with the broader BSE Sensex which gained 701.63 points to hit an all-time high of 72,038.43. The company's market capitalisation stood at ₹22,837.68 crore with more than 40.13 lakh shares exchanging hands on the BSE, as against the two-week average of 42.74 lakh shares.

At present, the share price of the company is trading 4.4% lower than the 52-week high of ₹119.44, which the company touched on December 14 this year. The share price of the company is trading 181.6% higher than the 52-week low of ₹40.50, which the company touched on March 29 this year.

In the past one month, three months and a year, the counter has given 39.56%, 32.08% and 127.25%, in return, respectively.

In the July to September quarter of FY24, the company's net profit surged by 14% year-on-year, mainly on account of higher interest income to ₹451.69 crore, as against ₹396.35 crore in the same period last year. The company’s higher total income stood at ₹1,880.85 crore in the September quarter, as against ₹1,746.87 crore in the same period last year.

Notably, there exists huge growth potential in the housing and infrastructure sector owing to the government’s focus on the implementation of sustainable development goals & urbanisation, according to a recent report by research firm ICICI Securities. “Capital expenditure in the infrastructure sector is expected at ~₹111 lakh crore in FY2-25E, of which urban infrastructure is projected at ~₹19 lakh crore,” the research firm says.

"Post stalling in Covid, state government capex for housing & urban infrastructure witnessed gradual recovery in FY22-FY23; which is expected to gather pace in FY24-25E. Strong budgetary allocation of ~₹10 lakh crore for capex in FY24 with focus on PMAY (housing), Jal Jeevan Mission (water) and other projects to enable healthy growth at ~10% CAGR in FY24-25E," the report says.

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