In an exclusive interview with TechObserver.in, HUDCO Chairman and Managing Director Sanjay Kulshrestha reflected on his first year of leadership, highlighting the challenges, achievements, and future plans for the organisation. With over 32 years of experience in infrastructure financing, previously at REC Ltd., he transitioned from energy financing to the broader domain of housing and urban development, requiring him to adapt to new ministries and regulatory frameworks.
The HUDCO CMD acknowledged that gaining acceptance from employees and stakeholders was his biggest challenge. “When a new person joins directly as CMD, the acceptance by the employees and stakeholders is very important. Until you are accepted, whatever decision you take will not be effective,” he noted.
Over the past year, the HUDCO chief focused on understanding the company’s internal workings and building trust. This effort has led to positive responses from the workforce, resulting in significant progress in areas such as HR policies, employee welfare, and operational efficiency. The organisation also updated its business policies to align with market demands, particularly by ensuring project cash flows support policies to minimise risks like Non-Performing Assets (NPAs).
One of the top executive’s key achievements was securing the status of Infrastructure Finance Company (IFC) for HUDCO from the Reserve Bank of India (RBI). This designation enables HUDCO to expand its infrastructure financing portfolio. The CMD highlighted the RBI‘s supportive approach during this process but emphasised that the responsibility of compliance with regulatory standards is now greater than ever.
To tackle high borrowing costs, the HUDCO leader leveraged his experience from REC, implementing measures like raising funds through External Commercial Borrowing (ECB). As a result, HUDCO reduced its cost of funds by approximately 35-36 basis points—a significant achievement. The organisation’s sanctions surged from around ₹25,000 crore to approximately ₹82,000 crore in the last year, doubling disbursements. Income and assets also increased by 30% and 15%, respectively.
Discussing HUDCO’s future direction, the CMD confirmed the company’s openness to financing both private and public projects. He stressed the importance of the private sector in India’s development, aligning with the government’s ‘Viksit Bharat’ (Developed India) vision for 2047. HUDCO, which had paused private sector funding in 2013, is now rebuilding its capacity, having recruited 766 officers with relevant expertise. The HUDCO chief noted that the organisation plans to proceed cautiously, ensuring high standards for project selection.
Reflecting on his leadership approach, the HUDCO CMD emphasised the importance of changing organisational mindsets. Drawing on his experience at REC, he prioritised not only business growth but also corporate communications, CSR, and HR, to create a holistic and transparent approach. He underscored HUDCO’s commitment to social responsibility, including dedicating 2% of earnings to CSR initiatives aimed at supporting the most underprivileged sections of society.
Looking ahead, the HUDCO leader outlined an ambitious plan to triple the loan book from ₹1 lakh crore to ₹3 lakh crore by 2030, in line with the Government of India’s PMAY 2.0 initiative. The company aims to collaborate closely with state agencies to ensure every citizen has a roof over their head within five years. Additionally, HUDCO plans to secure low-cost funding for infrastructure projects, as studies estimate a requirement of ₹142 lakh crore for infrastructure investment by 2030.
The top executive also highlighted a significant milestone where HUDCO raised approximately $448 million from the Japanese market at competitive rates, leveraging Japan‘s low interest rates. This international investment reflects confidence in India’s growth potential and HUDCO’s strategy. He acknowledged the role of the Prime Minister in building global trust for India, which has facilitated such investments.
On the technology front, Kulshrestha elaborated on the organisation’s transition to a paperless e-office system and ERP implementation. The next step involves integrating artificial intelligence (AI) and machine learning (ML) to enhance compliance management, asset-liability oversight, and project appraisal processes. He envisions a real-time appraisal system using AI, allowing simultaneous project reviews by all relevant departments, thus improving efficiency and decision-making.
Regarding trends in urban infrastructure financing, the HUDCO chief noted a shift towards asset monetisation and public-private partnerships (PPP). He explained that these models, initially applied in the road sector, are now expanding to ports and airports. With large-scale projects increasingly funded through private equity and infrastructure investment trusts (InvITs), NBFCs like HUDCO must rapidly adapt to these evolving financial models.
