HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH Fund 2 | Renting vs. Buying: What’s the Best Choice?

HUDCO stock plunged 10% to ₹195.66 amid heavy selling, driven by profit booking, sector-wide concerns, and technical weakness. Homebuyers welcomed the ₹15,000 crore SWAMIH Fund 2, urging swift completion of stalled projects and accountability for errant builders. The rent vs. buy debate continues, with renting offering flexibility while homeownership provides long-term financial and emotional security.

CONTENTS:

• HUDCO Stock Plummets 10%: Analyzing the Reasons Behind the Decline and Future Outlook
• Homebuyers’ Association Welcomes SWAMIH Fund 2, Calls for Completion of Stalled Projects
• Renting vs. Buying a Home: Weighing the Pros and Cons

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH Fund 2 | Renting vs. Buying: What’s the Best Choice?

HUDCO Stock Plummets 10%: Analyzing the Reasons Behind the Decline and Future Outlook

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH The Housing and Urban Development Corporation (HUDCO) faced a dramatic downturn in trading on February 3, 2025, as its stock plunged 10%, hitting the lower circuit at ₹195.66. The stock opened at ₹214.00, slightly below its prior close of ₹217.40, but quickly declined amid heavy selling pressure. With an immense trading volume of 2.09 crore shares worth ₹410 crore, investors scrambled to understand the cause of the sudden drop. This article delves into the factors behind the decline, analyzing technical and fundamental aspects, expert opinions, and potential future scenarios for one of India’s leading infrastructure finance firms.

Market Performance: Key Figures and Immediate Catalysts

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH HUDCO experienced intense volatility throughout the day, opening at ₹214.00 and briefly touching ₹214.20 before tumbling to its lower circuit limit of ₹195.66 within hours. The 10% drop aligns with the stock’s broader downward trajectory over the past year, now trading 44.6% below its 52-week high of ₹353.70 (April 2024). While no single event has been pinpointed as the trigger, analysts suggest a mix of profit booking, sector-wide corrections, and concerns over declining government infrastructure expenditure. The trading volume—significantly above the 30-day average of 1.2 crore shares—indicates panic-driven selling.

Sector-Wide Pressures and Policy Uncertainty

HUDCO’s decline reflects broader concerns in the infrastructure and housing finance sectors. Reports of project delays and tightening lending norms have dampened market sentiment. Competitors such as NBCC and IRB Infrastructure also saw moderate declines, though not as severe as HUDCO’s. A Mumbai-based market strategist explained, “Investors are factoring in risks tied to delayed project approvals and liquidity challenges. HUDCO’s reliance on state government projects—often subject to bureaucratic delays—has heightened these fears.”

Technical Analysis: Breakdown and Support Levels

From a technical standpoint, HUDCO’s stock signaled weakness after breaching its 200-day moving average of ₹208.50, reinforcing a bearish trend. The Relative Strength Index (RSI) of 28 suggests the stock is in oversold territory, yet with the lower circuit in effect, buyers remained cautious. A senior analyst at ICICI Securities remarked, “The next crucial support level is ₹152.55, the stock’s 52-week low. If the selling pressure continues, HUDCO could test this level unless institutional buyers step in.”

Expert Insights: Buying Opportunity or Warning Sign?

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH Market opinions are divided on whether HUDCO’s sharp decline presents a buying opportunity or a warning signal.

• Rahul Sharma, Director, Equity99 Advisors: “The sell-off is driven by systemic risks rather than company-specific issues. Investors should wait for stability before considering entry.”
• Aparna Mishra, Chief Economist, Motilal Oswal: “HUDCO maintains strong fundamentals with a solid project pipeline. This could be a contrarian investment opportunity for long-term portfolios.”

HUDCO’s price-to-book ratio of 1.2x is near historical lows, indicating potential undervaluation. However, concerns remain over its rising non-performing assets (NPAs), which reached 4.2% in Q3 FY25.

Historical Perspective: From 52-Week Highs to Current Lows

HUDCO’s journey from its 52-week high of ₹353.70 in April 2024 to ₹195.66 today marks a 45% decline in market capitalization. The stock began its downturn in late 2024 after the Reserve Bank of India (RBI) flagged rising NPAs in the infrastructure finance sector. While a brief recovery occurred in December 2024 on hopes of a government stimulus, those gains were short-lived. Notably, the Nifty Infrastructure Index has declined only 12% in the same period, highlighting HUDCO’s underperformance.

Investor Strategies: Managing Market Uncertainty

With the stock locked at its lower circuit, exiting remains a challenge for existing shareholders. Analysts suggest the following strategies:

• Tracking Institutional Movements: Domestic mutual funds hold an 8.3% stake in HUDCO, and their trading patterns could indicate potential recovery.
• Assessing Q4 Earnings: The company’s upcoming results (expected in March 2025) will provide insights into asset quality and project progress.
• Diversification: Balancing HUDCO exposure with defensive stocks or fixed-income instruments could help mitigate risk.

Future Outlook: Policy Developments and Market Sentiment

Market attention is now focused on the Union Budget 2025–26, which is expected to allocate ₹1.2 lakh crore toward urban infrastructure. A larger-than-expected budgetary push could reignite investor confidence in HUDCO. Additionally, the company’s plans to diversify into renewable energy projects—an industry growing at 20% year-over-year—may help mitigate risks associated with its traditional lending portfolio.

Homebuyers’ Association Welcomes SWAMIH Fund 2, Calls for Completion of Stalled Projects

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH The Forum For People’s Collective Efforts (FPCE) has welcomed the launch of the ₹15,000 crore SWAMIH Fund 2, urging the government to ensure the completion of all stalled housing projects to “clean the slate once and for all.” While calling the fund a positive move, the FPCE emphasized the need for targeted funding to complete outstanding projects and advocated for barring builders who have misused homebuyers’ funds from launching new developments.

FPCE President Abhay Upadhyay stated that the fresh allocation would bring much-needed relief to thousands of homebuyers who have faced long delays in receiving possession of their homes. “It’s time to systematically complete all stalled projects and resolve this crisis once and for all,” he said.

Relief for Homebuyers Amid Stalled Projects

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH The newly announced SWAMIH Fund 2 aims to complete an additional 1 lakh housing units, supplementing the 50,000 units already completed under the first phase of the scheme. Additionally, 40,000 more units are expected to be delivered in 2025 through SWAMIH Fund 1.

Upadhyay stressed the importance of accountability, stating, “Since government funds—essentially taxpayers’ money—are involved, it is crucial to identify and take action against builders who have misused homebuyers’ hard-earned money. Such developers should be debarred from launching new projects.”

Background on the SWAMIH Fund

The Centre launched the Special Window for Affordable and Mid-Income Housing (SWAMIH) initiative in 2019 to finance and complete stalled housing projects across India. The first fund, with a corpus of ₹15,530 crore, is managed by SBICAP Ventures Ltd, a subsidiary of the State Bank of India (SBI).

In her Budget 2025 speech on February 1, Union Finance Minister Nirmala Sitharaman announced SWAMIH Fund 2, allocating ₹15,000 crore to expedite the completion of 1 lakh housing units.

The move has been widely welcomed by homebuyers’ groups, who see it as a step toward resolving long-standing issues in the real estate sector. However, concerns remain about effective implementation and ensuring that irresponsible developers do not continue to exploit buyers.

Renting vs. Buying a Home: Weighing the Pros and Cons

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH Deciding whether to rent or buy a home is a complex choice, much like navigating a tricky relationship dilemma. With property prices on the rise and capital appreciation not as robust as before in many cities, potential buyers often wonder if taking a home loan is the right move. Renting, particularly near the workplace, offers flexibility, while homeownership provides a sense of security and long-term investment. Beyond financial considerations, a home carries deep emotional value. Let’s examine the tax implications and key factors of both options.

Renting a Home

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH From a tax standpoint, one major benefit of renting is the exemption available for House Rent Allowance (HRA)—a tax-efficient component of salaried incomes under the old tax regime. If HRA is not part of the salary structure (as in the case of self-employed individuals or consultants), a deduction of up to ₹5,000 per month can be claimed from gross taxable income. However, this benefit is not available under the new tax regime.

HRA exemption is calculated based on the lowest of the following:

• Rent paid minus 10% of salary (including basic salary and dearness allowance)
• 50% of salary for residents of Delhi, Mumbai, Kolkata, or Chennai (40% for other cities)
• Actual HRA received

Advantages of Renting:

✔ Lower rent compared to home loan EMIs in many cases
✔ Greater flexibility in choosing location and type of residence
✔ Easier relocation within a city or to a different one
✔ Tax benefits under the old tax regime

Disadvantages of Renting:

✘ Monthly rent payments do not contribute toward ownership of an asset
✘ Rent typically increases annually, increasing financial outflow over time
✘ Limited ability to modify or customize the rented space
✘ Possibility of eviction on short notice

Buying a Property

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH Homeownership comes with tax benefits, but only under the old tax regime. When purchasing a home using a home loan, the Equated Monthly Installment (EMI) consists of two components: principal repayment and interest payment.

Tax Benefits on Buying a Home

• Principal repayment: Deductible under Section 80C (subject to the overall limit of ₹1.5 lakh), including expenses like stamp duty and registration fees.
• Interest payment:
  • For self-occupied or vacant homes, up to ₹2 lakh per year in interest paid is deductible.
  • For rented properties, deductions apply not only for interest paid but also for municipal taxes and a 30% standard deduction on rental income.
• Set-off and carry forward of losses: If a home loan results in a loss (for example, if the house is self-occupied and no rental income is generated), a maximum of ₹2 lakh can be adjusted against other sources of income in a given financial year. Losses beyond this amount can be carried forward for eight assessment years but can only be offset against income from house property.
• Notional Rent Taxation: If an individual owns three or more houses, two properties are considered self-occupied, but additional homes are taxed as “deemed let-out” based on market rental value.

Advantages of Buying a Home:

✔ Homeownership builds an asset over time, with EMIs contributing toward ownership
✔ Significant tax benefits on home loan repayment
✔ Long-term stability and emotional satisfaction

Disadvantages of Buying a Home:

✘ High initial costs, including down payments, registration fees, property taxes, and maintenance expenses
✘ Real estate is an illiquid asset, meaning it cannot be quickly sold if needed
✘ Property prices fluctuate, and returns on investment may not always meet expectations
✘ EMIs are a long-term financial commitment, which must be met even in situations like job loss

Conclusion

HUDCO Stock Crashes 10% | Homebuyers Welcome SWAMIH The choice between renting and buying depends on individual financial stability, lifestyle preferences, and long-term goals. Renting offers flexibility and lower short-term costs, while buying provides asset creation and tax benefits. Carefully evaluating one’s financial situation and future plans is essential before making this significant decision.