HUDCO approves fund raise plan of up to Rs 65,000 crore for FY26, borrowing limit hiked to Rs 2.5 lakh crore

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26 Aug, 2025 12:21

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Housing and Urban Development Corporation (HUDCO) on April 4 approved the plan to increase borrowing for the ongoing FY26 by Rs 65,000 crore, as well as raised the overall borrowing limit to Rs 2.5 lakh crore from the current Rs 1.5 lakh crore.

The decision to raise the overall borrowing limit of the company is subject to approval by the shareholders, HUDCO said in an exchange filing.

Despite the development, HUDCO shares posted a strong decline, trading nearly 4 percent lower on April 4, in line with the general downturn in the market, fuelled by the reciprocal tariffs announced by US President Donald Trump.

The urban development company had recently said that it will raise Rs 2,000 crore through non-convertible debentures (NCDs) on a private placement basis, with a coupon rate of 7.19 percent. "The 'Bond Allotment Committee' in their meeting...has approved the raising of Bonds as Unsecured, Taxable, Redeemable, Non-Convertible, Non-Cumulative NCDs of face value of Rs. 1,00,000 each (Series-G 2024) aggregating up to Rs. 2,000 crore on Private Placement basis," the company had said on March 27.

In the past, HUDCO has cited inability to venture into very large projects alone where it is not able to fund it 100%, and has had to go ahead via a consortium, but the financier of housing projects has said that it prefers to 'go solo', in order to have own terms and monitoring framework for the project, as well as to have the freedom to take care of the borrowing during its lifetime.

During the December quarter earnings update, HUDCO had raised its borrowing for FY25 to Rs 55,000 crore from Rs 40,000 crore, citing 'quantum jump in business' as the reason.

On March 31, 2025, the company reported nearly 123 percent YoY jump in its loan disbursements to Rs 40,037 crore in FY25. Its loan sanctions meanwhile grew over 55 percent to Rs 1.28 lakh crore. "The company has continued its growth trajectory and has achieved exemplary business performance recording highest ever loan sanctions and disbursements for the year ended 31st March 2025," HUDCO said.