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Housing and Urban Development Corporation Ltd (Hudco) plans to raise an additional USD 1.3 billion through External Commercial Borrowings (ECB) over the next five months to support urban infrastructure financing across India. The company has already secured USD 700 million through ECBs this financial year and aims to mobilise up to USD 2 billion under the Reserve Bank of India's concessional forex swap window available until December 31, 2026. Alongside its borrowing plans, Hudco reported strong first-quarter FY27 financial results, with higher profit, income and a sharp decline in loan impairment provisions.
Housing and Urban Development Corporation Ltd (Hudco) plans to raise an additional USD 1.3 billion through External Commercial Borrowings (ECB) over the next five months to finance urban infrastructure projects across the country. The fund raising will be part of the company's broader plan to mobilise up to USD 2 billion through ECBs under the Reserve Bank of India's concessional US Dollar-Rupee forex swap window, which will remain available until December 31, 2026.
Hudco Chairman and Managing Director Sanjay Kulshrestha said the company has already raised USD 700 million through ECBs during the current financial year. He said the remaining USD 1.3 billion will be raised over the next five months depending on the company's funding requirements.
The Reserve Bank of India had introduced the special US Dollar-Rupee forex swap window in June to provide low-cost currency hedging support to public sector undertakings raising funds through External Commercial Borrowings. The facility is aimed at reducing hedging costs and making overseas borrowings more attractive for eligible state-owned entities.
Hudco had previously raised around USD 700 million through ECBs denominated in Japanese Yen during the last financial year. This year, the company plans to borrow in both US dollars and Japanese Yen. Kulshrestha said this will be Hudco's first overseas borrowing in US dollars, marking a diversification of its foreign currency funding strategy.
He added that the ECBs raised so far have carried an annual interest rate of 6.25 per cent, helping the company access relatively competitive funding for infrastructure financing.
Speaking about the company's overall borrowing programme for FY27, Kulshrestha said Hudco plans to raise around INR 75,000 crore during the financial year. Out of this target, the company has already mobilised nearly INR 20,000 crore, including funds raised through External Commercial Borrowings.
Hudco has been expanding its lending portfolio in recent years, with a major focus on financing affordable housing, urban infrastructure, water supply, sanitation, transport projects and other government-backed development initiatives. The public sector lender has also played an important role in funding projects under flagship urban development programmes, including Smart Cities and AMRUT.
The company also announced its financial performance for the first quarter of FY27. Net profit increased 35 per cent year-on-year to INR 851 crore, compared with INR 630 crore in the corresponding period last year.
Total income rose to INR 3,737 crore during the quarter from INR 2,945 crore a year earlier, reflecting growth in its lending business and higher earnings.
Hudco also reported a significant improvement in asset quality. Loan impairment provisions based on the Expected Credit Loss (ECL) method stood at INR 621 crore at the end of the first quarter, compared with INR 1,702.89 crore in the same period last year.
Apart from ECB borrowings, the company also raised INR 2,140 crore during the quarter through the private placement of listed non-convertible debt securities, strengthening its overall funding position to support future lending.
Source PTI
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