HUDCO aims for INR 500 bln disbursements in FY26, says MD Kulshrestha
This story was originally published at 19:58 IST on 7 May 2025
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--HUDCO: Aim to be zero net NPA co in 18 months
--CONTEXT: HUDCO top mgmt speaking at post Jan-Mar earnings press conference
--HUDCO: Looking to foray into port infra development
--HUDCO MD: Targeting around INR-1-tln disbursements under PM Awas Yojna 2.0
--HUDCO MD: To issue 54EC capital gains bond at 5.25% for 5 years
--HUDCO MD: Expect cost of funds at 6.50-6.60% by end of FY26
--HUDCO MD: Plan to raise $500 mln in Yen-denominated bonds in Jul-Sept
--HUDCO MD: Aim to grow by more than 25% FY26
--HUDCO MD: Plan to issue zero coupon bonds by June
--HUDCO MD: Aim for loan outstanding of INR 1.5 tln at end of FY26
--HUDCO MD: Aim for INR-500-bln disbursements in FY26
--HUDCO MD: 20% of total INR-650-bln fund-raising FY26 to come from abroad
--HUDCO MD: Comfortable with NIM of more than 3%
MUMBAI – Housing & Urban Development Corp. Ltd. aims to disburse loans amounting to INR 500 billion in the financial year 2025-26 (Apr-Mar), Sanjay Kulshrestha, chairman and managing director, said at a post-earnings press conference here. In FY25, the housing financier had disbursed INR 400.38 billion in loans.
The loan outstanding, or total loans disbursed by the company, is expected to rise to INR 1.5 trillion by the end of the current financial year from INR 1.27 trillion at the end of FY25, the HUDCO management said. Overall, the company aims to grow by more than 25% over the next few years, it said.
Under the government's housing scheme, Pradhan Mantri Awas Yojna 2.0, HUDCO plans to disburse loans to the tune of INR 1 trillion over the next five years. HUDCO also plans to start financing the development of sea ports and airports, the company said.
The cost of funds of the lender is expected to fall to 6.50-6.60% by the end of FY26 on the back of repo rate cuts by the Reserve Bank of India, the management said. As of Mar. 31, the cost of funds was 6.75%. The company's net interest margin had moderated to 3.36% in FY25 from over 4% in the previous financial year. The management hopes to keep the net interest margin over 3% going forward, it said.
In terms of asset quality, the state-owned lender has seen no slippages for the past two years, and aims for a net non-performing asset ratio of 0% in the next 18 months, the management said. The net credit impaired ratio was at 0.25% as of Mar. 31, mainly due to legacy slippages, it said.
RAISING FUNDS
The lender plans to raise up to INR 650 billion in the current financial year through various channels. Of the total, around 20% is expected to come from abroad, the management said. "So around 15,000 crores (INR 150 billion), or $2 billion, we will be raising via overseas bonds or external commercial borrowings," said Director (Finance) Daljeet Singh Khatri.
On Wednesday, the company was set to issue new 54EC capital gains bonds for retail investors which provide an exemption from long-term capital gains tax if invested within a certain timeframe. The company is hopeful of raising INR 10 billion through the new bonds, Khatri said.
The company aims to raise INR 50 billion via zero coupon bonds in June, the management said. The company's officials expect the zero coupon bond to be 40 basis points cheaper than their other domestic fundraising options. HUDCO will also look to raise $500 million worth of yen-denominated bonds in Jul-Sept.
"Yen is cheaper for us when compared to the dollar in terms of overseas borrowing, given the current geopolitical turmoil," Khatri said. "When compared to domestic borrowing also, the landed cost of yen borrowing is around 6.20%, which is lower than the 6.80% we get here," he said. HUDCO may also look to raise up to $250 million in yen-denominated social bonds in FY26 at a rate of around 6.25%, Khatri said.
HUDCO witnessed modest growth in net profit for the March quarter as expenses rose sharply on a 50% jump in finance costs. The financier's bottom line rose only 4% on year and fell sequentially to INR 7.28 billion for the March quarter. Shares of the lender ended 1.7% lower Wednesday at INR 214.21 on the National Stock Exchange. End
US$1 = INR 84.82
Reported by Kabir Sharma
Edited by Rajeev Pai
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