Govt grants HUDCO permission to raise funds via capital gains bonds
This story was originally published at 19:11 IST on 8 April 2025
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--Govt grants HUDCO permission to raise funds via capital gains bonds
NEW DELHI – The government has allowed the Housing and Urban Development Corp to raise funds through 54EC bonds, also known as capital gains bonds, the finance ministry said in a gazette notification on Tuesday. "HUDCO shall utilise the proceeds from such bonds only for those infrastructure projects which can service the debt out of the project revenues without being dependent on the state governments for the service of debts," the notification said.
HUDCO is now the fifth company that can raise funds through this special instrument. The other companies are REC Ltd., National Highway Authority of India, Power Finance Corp. Ltd., and Indian Railway Finance Corp. Ltd.
As per the Income Tax Act, investors making capital gains on the sale of immovable property can invest in 54EC bonds to save on long-term capital gains. Though these bonds offer a lower rate of interest at 5.25%, investors benefit from the tax exemption enjoyed by these instruments. Investors can invest up to INR 5 million in a financial year in these bonds, which have a lock-in period of five years.
The board of HUDCO has approved fund-raising of up to INR 650 billion in 2025-26 (Apr-Mar). HUDCO reported a 41.6% jump in its net profit for Oct-Dec on the back of strong growth in disbursements--the bottom line rose to INR 7.35 billion on the back of a 149% increase in disbursals at INR 100.61 billion. Shares of HUDCO closed at INR 207.50 on the National Stock Exchange, up 6.1%. End
Reported by Priyasmita Dutta
Edited by Akul Nishant Akhoury
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