Housing and Urban Development Corporation (HUDCO) announced a major financial expansion for the fiscal year 2025-26 (FY26), as its board approved a plan to raise up to Rs 65,000 crore through market borrowings. In addition, the company’s overall borrowing limit has been proposed to be raised from Rs 1.5 lakh crore to Rs 2.5 lakh crore, a move subject to shareholder approval. Despite this significant development, HUDCO shares saw a nearly 4 percent drop on April 4, tracking broader market declines triggered by US tariff retaliation.

Strategic Funding to Support Rapid Growth in Sanctions and Disbursements

The decision to bolster fundraising aligns with HUDCO’s strong growth trajectory in FY25, during which it reported an impressive 123 percent year-on-year surge in loan disbursements, totaling Rs 40,037 crore. Sanctions also climbed substantially, rising 55 percent YoY to reach Rs 1.28 lakh crore. This growth has put HUDCO on course for further expansion, especially in light of increasing demand for urban infrastructure and housing finance in India.

The company has stated that this increased borrowing capability will allow it to independently finance larger projects without relying heavily on consortium lending models. In prior statements, HUDCO emphasized its preference for “going solo” on major financing deals, citing greater autonomy in terms of lending conditions, project oversight, and repayment flexibility.

Highlights:

HUDCO approves FY26 borrowing plan of up to Rs 65,000 crore
Overall borrowing limit raised to Rs 2.5 lakh crore, pending shareholder nod
FY25 loan disbursements rose 123% YoY to Rs 40,037 crore
Loan sanctions up 55% YoY to Rs 1.28 lakh crore
Company aims to finance more large-scale projects independently

Rs 2,000 Crore NCD Issue in March, Coupon Set at 7.19%

In line with its funding roadmap, HUDCO recently raised Rs 2,000 crore through non-convertible debentures (NCDs) on a private placement basis. The Series-G 2024 bonds carry a coupon rate of 7.19%, reflecting a balanced approach to cost-efficient fundraising. The bond issue was part of HUDCO’s ongoing diversification of funding sources to support long-tenure, capital-intensive housing and infrastructure development.

In a March 27 disclosure, the company said the Bond Allotment Committee approved the issuance of unsecured, taxable, redeemable, non-convertible, non-cumulative NCDs, with each unit priced at Rs 1 lakh. These instruments are key to maintaining liquidity in light of the company’s expanding credit pipeline.

Highlights:

HUDCO raised Rs 2,000 crore via NCDs at 7.19% coupon in March 2025
Series-G 2024 issuance on a private placement basis
Bonds structured to ensure flexibility and long-term capital support

Share Price Drops on Broader Market Weakness, Despite Positive Outlook

While HUDCO’s long-term prospects remain robust, its shares fell nearly 4 percent on April 4 amid widespread market volatility linked to US President Donald Trump’s tariff announcement. The US’s imposition of reciprocal tariffs on several global economies, including India, has dampened investor sentiment across sectors, including infrastructure and finance.

HUDCO’s drop was in line with broader market indices: the BSE Sensex declined 930.67 points, and the NSE Nifty fell by 345.65 points amid heavy selling in equity markets triggered by fears of an escalating global trade war. Analysts expect this to be a short-term reaction, especially as HUDCO continues to show strong fundamentals and is poised to benefit from government-backed infrastructure initiatives.

Highlights:

HUDCO shares fell 4% amid wider market correction
Triggered by global trade war fears and US reciprocal tariffs
Sentiment-driven fall; company fundamentals remain strong
Analysts expect recovery with infrastructure push and improved liquidity

Aiming for Leadership in Urban Infrastructure Financing

HUDCO’s decision to raise its funding capacity marks a proactive step toward meeting India’s ambitious housing and infrastructure targets under key schemes such as PM Awas Yojana, Smart Cities Mission, and AMRUT. The enhanced funding envelope of Rs 2.5 lakh crore will provide significant financial muscle for HUDCO to support states and public sector entities in developing affordable housing, urban infrastructure, and transportation networks.

With India’s infrastructure sector expected to attract over $1.5 trillion in investment over the next decade, HUDCO’s aggressive fund mobilisation plan will allow it to secure a leadership position in financing large-scale urban growth projects.

Highlights: