HUDCO Fined ₹5.4 Lakh by Exchanges Over Board Composition Lapses

Housing & Urban Development Corporation Ltd (HUDCO) has received a combined fine of ₹542,800 from the BSE and NSE. The penalty is for non-compliance with SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations regarding its board composition.

The lapse occurred during the quarter ended December 2025. The total penalty includes a base fine of ₹460,000 plus ₹82,800 in Goods and Services Tax (GST) at 18%. HUDCO has 15 days from the respective exchange notices to pay the fine.

HUDCO has formally requested a waiver for these penalties. The company stated that director appointments are outside its direct control, as they are made by the President of India through the Ministry of Housing and Urban Affairs (MoHUA). This dependency on government appointments has led to the compliance lapse.

The fine highlights increased regulatory scrutiny on listed public sector undertakings (PSUs) over corporate governance. For HUDCO, this points to the challenge of maintaining board composition when appointments depend on external government processes.

HUDCO is a Miniratna PSU under the Ministry of Housing and Urban Affairs, engaged in urban development and housing finance. The company faced similar fines from NSE and BSE in June 2021 for past quarters, citing the same issue of government control over director appointments.

Two Independent Directors, Shri Kantilal Chaturbhai Patel and Smt. Sabitha Bojan, whose appointments were made via MoHUA orders, completed their one-year tenures on April 6, 2026.

Continued non-compliance or failure to pay the fines could lead to HUDCO's transfer to the Z-group and potentially trading suspension. As of September 30, 2024, HUDCO's board comprised 7 directors (3 Functional, 1 Govt Nominee, 3 Independent), against a requirement of 4 Independent Directors.

SJVN Limited and REC Limited have faced similar fines from NSE and BSE for non-compliance with board composition rules due to delayed director appointments from their ministries. These companies also sought waivers, citing that director appointments were beyond their control.