Image Source: CA B K Goyal & co LLP
Housing and Urban Development Corporation Ltd (HUDCO), India's premier state-owned housing and urban infrastructure project financier, has sanctioned raising debentures up to ₹21.9 billion. This is in line with HUDCO's consistent drive to augment its funding base and finance the nation's ambitious urban development plans.
Debenture Issue Approved:
HUDCO board has approved the issue of debentures amounting up to ₹21.9 billion on private placement. Funds will be raised by unsecured, redeemable, non-convertible debentures (NCDs), which are a popular instrument with institutional investors demanding stable returns.
Purpose and Impact:
The funds raised will be utilized to support a series of housing and urban infrastructure developments, in keeping with HUDCO's fundamental objective of facilitating sustainable urbanization across India. The development comes on the back of HUDCO recording historic loan sanctions and disbursements, as FY25 loan sanctions rose by over 55% to ₹1.28 lakh crore and disbursements by 123% to ₹40,037 crore.
As Part of Bigger Fundraising Strategy
This issue of debentures is part of HUDCO's overall FY26 fundraising program that includes proposals to raise up to ₹65,000 crore and a higher borrowing limit of ₹2.5 lakh crore, subject to approval by shareholders. The company has also raised funds in recent times through other tranches of NCDs at competitive coupon rates, as investors show strong demand for its debt securities.
Solid Financial Performance:
HUDCO logged a 41.6% increase in consolidated net profit at ₹735 crore and a 36.9% increase in total income to ₹2,770 crore during Q3 FY25, highlighting its strong operating momentum. Its sound finances and government support have helped it sustain AAA credit ratings, which make its bonds more appealing to investors.
Market Response:
In spite of the encouraging business developments, HUDCO shares have also witnessed some volatility, in tune with the wider market trends and investor sentiments relating to interest rates and outlook of the infrastructure sector.
"Such growth continues uninterrupted and the company has delivered outstanding business performance, with highest ever sanctions and disbursements during the year ended 31st March 2025," HUDCO said.
With this recent approval, HUDCO is poised to direct new capital into India's fast-changing urban infrastructure sector, favoring affordable housing, smart cities, and greenfield development schemes across the country.
Source: MarketScreener, Economic Times, Business Standard, Moneycontrol
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