Hudco's net NPA jumps to 5%

Net NPA for Housing and Urban Development Corporation had jumped to 10.2% in the first quarter ended June 2013

The net bad debt of the state owned company Hudco has zoomed to over 5% as of now from 0.83% in March this year due to stress in the power sector, a top official said.

The net NPA (non-performing assets) for the Housing and Urban Development Corporation had jumped to 10.2% in the first quarter ended June 2013 from a mere 0.83% as on March, 2013.

In July, the company had been able to realise Rs 193.28 crore resulting in reduction in net NPA from 10.20% to 5.09%, Hudco regional chief (east) Subrato Saha told PTI..

"Most of the fresh NPA accretion is due to our exposure to the power sector which is facing difficult times. But, we are taking every possible measure to bring it under control," he said.

Speaking on the sidelines of a roadshow for a tax-free bond issue, Saha said currently Rs 360 crore (principle amount) was outstanding in two troubled power projects.

The company said there is no major issue with the road sector as most of the lending is to the government sector.

Meanwhile, Hudco has raised Rs 1,605 crore so far from the tax-free bonds.

The bond issue hit the market on September 17 and would close on October 14. The issue size is Rs 750 crore with an option to retain over-subscription upto Rs 4,809.20 crore.

Hudco did not expect any hurdle due to recent RBI action that pushed interest rate higher.

If you are a retail investor applying in individual capacity up to Rs 10 lakh across all series, then the applicable tax free annual coupon rate is 8.39% for 10-year maturity, 8.76% for 15-year maturity and 8.74% for 20 year maturity.