Hudco slides 9% as two borrowing entities default on repayment dues

Last month Moody's Investor Service had downgraded the company's outlook to 'negative' along with 5 other financial companies including State bank of India, HDFC Bank, and Export-Import Bank of India

Shares of housing finance firm Housing and Urban Development Corporation Ltd (Hudco) were under pressure in the early trade, down 8.6 per cent to Rs 36.9 on the BSE on Thursday, after the company said two of its agencies have defaulted on payment worth Rs 87.46 crore, which has been classified as non-prforming asset (NPA).

"Two borrowing agencies of the company have defaulted in repayment of their dues with a defaulted amount of Rs 8,746.06 lakh against the principal outstanding of Rs 86,940.75 lakhs as on date and have been classified as NPAs," it said in a regulatory filing. This would lead to additional 1.14 per cent of gross NPAs, it added. READ FILING HERE

At 9:41 AM, the stock was trading 6.19 per cent lower at Rs 37.9 per share, as against a 0.06 per cent rise in the benchmark S&P BSE Sensex. Over 2 million shares have changed hands on the NSE and BSE till the time of writing of this report.

For July-September quarter of 2019-20, the company clocked net profit of Rs 725.84 crore, up 2.16 times than the profit of Rs 335.68 crore reported in Q1FY20. Total Income came in at Rs 2,053.79 crore, as against Rs 1,816.19 crore logged during the previous quarter of the current fiscal. 

Last month Moody's Investors Service had downgraded the company's outlook to 'negative' along with 5 other financial companies including State bank of India, HDFC Bank, and Export-Import Bank of India (EXIM Bank). This came after Moody's downgraded India's sovereign credit rating from 'stable' to 'negative'.

The close links between EXIM Bank, HUDCO, IRFC, and SBI and the Indian government “is the key reason why Moody’s has changed the outlook for these companies to negative from stable, after doing the same for the sovereign rating”, the global firm had said in a statement. 

The negative outlook “reflects that Moody’s will downgrade the ratings of these companies if Moody’s downgrades the rating of India sovereign to Baa3 from Baa2”, the rating agency said in a statement.