Hudco To Renew Rs.7,000 Crore Debt In FY 2026

Hudco To Renew Rs.7,000 Crore Debt In FY 2026

The Indian public sector undertaking is targeting Rs.65,000 crore in total borrowings

Government-owned Housing & Urban Development Corporation (Hudco) is contemplating refinancing old high-cost debt of Rs.7,000 crore in the Financial Year 2025-26. This is to lower its cost of funds by taking advantage of the softening interest rates.

Speaking on the plans, Sanjay Kulshrestha, Chairman and Managing Director, Hudco, apprised that the refinancing exercise had begun.

He said that recently, the Indian public sector undertaking raised Rs.2,190 crore via non-convertible debentures with a five-year maturity carrying a coupon rate of 6.90 percent. In this financial year, it expects to reduce funding by 10–15 basis points (bps).

The expert claimed that the cost of funds rose to 7.44 percent in FY 2025 from 7.25 percent in FY 2024.

However, the yield improved to 9.5 percent from 9.04 percent a year ago. Its net interest margin (NIM) rose to 3.22 percent in 2025 from 3.18 percent.

Kulshrestha stated that while further repo rate cuts in the current financial year are anticipated, the dollar is also expected to weaken. This may allow additional reductions in the cost of funds.

Meanwhile, the Reserve Bank of India (RBI) has reduced the policy repo rate by 50 bps, with a 25 bps cut in February and another in April 2026. The current policy repo rate is 6.0 percent.

The Hudco official hoped to raise Rs.65,000 crore via bonds and external commercial borrowings. The institution raised Rs.51,133.41 crore in FY 2025 compared to Rs.21,975.13 crore in FY 2024.

Regarding business growth in FY 2026, Kulshrestha stated that disbursements could be around Rs.50,000 crore. While the sanctions in March 2025 were Rs.1.27 trillion, the amounts were disbursed over two years, depending on the progress the project made.

He added there was a committed pipeline of over Rs.2 trillion and the outstanding loan could touch Rs.1.5 trillion by March 2026.

As per the analyst, loan disbursements grew by 122.59 percent year-on-year to Rs.40,038 crore in FY 2026 and outstanding loans rose by 34.72 percent to Rs.1.24 trillion at the end of March 2025.