HUDCO Announces Rs 2,500 Crore NCD Issue: A Strategic Move in Debt Financing

Housing and Urban Development Corporation Limited (HUDCO), a key player in India's urban infrastructure and housing finance sector, has announced plans to issue unsecured, taxable, non-convertible debentures (NCDs) worth Rs 2,500 crore through private placement. This move signals HUDCO's strategic approach to debt financing and liquidity management.

Key Details of the NCD Issue

Parameter	Details
Base Issue Size	Rs 500 crore
Greenshoe Option	Up to Rs 2,000 crore
Total Issue Size	Rs 2,500 crore
Tenure	7 years
Coupon Rate	9%
Listing	BSE
Issue Type	Private Placement

Purpose and Implications

HUDCO plans to utilize the funds raised through this NCD issue for various purposes:

Lending activities
Refinancing existing debt
General business operations

This diversified use of funds indicates HUDCO's focus on both expanding its core lending business and optimizing its debt structure.

Financial Context

To understand the significance of this NCD issue, let's look at HUDCO's recent financial position:

Financial Metric	FY 2025 (Rs. crore)	YoY Change
Total Assets	128,497.00	37.54%
Total Liabilities	110,527.60	33.57%
Shareholders' Capital	17,969.80	8.16%
Current Assets	2,733.10	64.94%
Non-Current Liabilities	104,207.00	51.97%

HUDCO's balance sheet shows significant growth, with total assets increasing by 37.54% year-over-year. The company's non-current liabilities have also grown substantially, indicating an increased focus on long-term financing.

Market Implications

Debt Market Impact: This large NCD issue may influence the corporate bond market, potentially affecting yields for similar-rated instruments.
Investor Interest: The 9% coupon rate could attract investors seeking stable returns in the current low-interest-rate environment.
Credit Profile: The unsecured nature of the NCDs suggests HUDCO's confidence in its credit standing and future cash flows.

Conclusion

HUDCO's Rs 2,500 crore NCD issue represents a significant move in its financing strategy. As the company continues to grow its asset base and expand its operations, this debt issuance provides it with the necessary capital to fund its plans. Investors and market watchers should closely monitor how HUDCO deploys these funds and the subsequent impact on its financial performance and market position in the urban infrastructure and housing finance sectors.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.95%	-4.40%	-1.97%	-9.01%	-9.73%	+370.70%

Housing and Urban Development Corporation Limited (HUDCO) has received comprehensive credit rating reaffirmation from CARE Ratings Limited, covering instruments worth over ₹2.09 lakh crore. The rating agency reaffirmed its 'CARE AAA; Stable' rating across multiple facilities and bonds, underscoring HUDCO's strategic importance and robust financial position.

Rating Reaffirmation Details

CARE Ratings has maintained its highest credit ratings across HUDCO's diverse funding instruments. The comprehensive reaffirmation covers bank facilities, bonds, perpetual debt instruments, and commercial paper programs.

Instrument Type:	Amount (₹ crore)	Rating	Action
Long-term/Short-term Bank Facilities:	80,000.00	CARE AAA; Stable / CARE A1+	Reaffirmed
Various Bonds:	1,15,593.88	CARE AAA; Stable	Reaffirmed
Perpetual Debt Instruments:	4,000.00	CARE AAA; Stable	Reaffirmed
Commercial Paper:	10,000.00	CARE A1+	Reaffirmed

Strategic Importance and Government Support

The rating reaffirmation reflects HUDCO's strategic importance to the Government of India, which holds a 75.00% stake as of September 2025. HUDCO serves as the central nodal agency for the government's 'Housing For All' scheme and actively participates in key initiatives including Jal Jeevan Mission, AMRUT, and Pradhan Mantri Awas Yojana.

Financial Performance Highlights

HUDCO's financial metrics demonstrate strong operational performance and asset quality improvements:

Financial Metric:	H1 FY26	FY25	Previous Period
Assets Under Management:	₹1,44,554 crore	₹1,24,828 crore	30% YoY growth
Net Profit:	₹1,340 crore	₹2,709 crore	Strong profitability
Return on Total Assets:	1.90%	2.40%	Healthy returns
Capital Adequacy Ratio:	38.03%	46.60%	Well above regulatory minimum
Net NPA Ratio:	0.07%	0.25%	Significant improvement

Business Transformation and Growth

HUDCO successfully transitioned from a Non-Banking Financial Company - Housing Finance Company (NBFC-HFC) to NBFC-Infrastructure Finance Company (NBFC-IFC) in August 2024. This transition has enabled increased infrastructure financing, with urban infrastructure now comprising 65% of the loan book compared to 35% for housing as of September 2025.

The company's loan portfolio maintains strong credit quality with 98.70% lending to the government sector and 87.76% of gross loans secured by government guarantees, significantly reducing credit risk exposure.

Outlook and Market Position

CARE Ratings expects HUDCO to maintain its strategic importance to the Government of India while continuing to demonstrate healthy profitability, capitalization, and asset quality. The stable outlook reflects confidence in HUDCO's role in implementing national infrastructure initiatives under the National Infrastructure Pipeline.

With over five decades of operational experience and strong government backing, HUDCO remains well-positioned to capitalize on India's infrastructure development opportunities while maintaining its leadership position in housing and urban development financing.