HUDCO plans issue of debentures, here's how much it aims to raise

Housing & Urban Development Corporation Ltd. (HUDCO), a state-run enterprise, has announced intentions to raise up to Rs 3,000 crore through the issuance of non-convertible debentures (NCDs) on a private placement basis. This fund-raising initiative includes a base issue size of Rs 500 crore, with a green shoe option allowing for an additional Rs 2,500 crore.

The NCDs, which will be unsecured and redeemable at par after three years, are structured without any security or charge over HUDCO's assets. HUDCO has assured that there are no delays or defaults in interest or principal payments. The issuance underscores HUDCO's strategic focus on strengthening its financial position while maintaining operational efficiency.

Following the announcement of the fund-raising plan, HUDCO's shares traded 0.76% lower at Rs 230.81. Despite this slight dip, the stock has gained approximately 3% over the past month. The NCDs will carry a coupon rate of 6.64% per annum, with interest payments scheduled for June 17, 2026, July 17, 2027, and July 17, 2028.

This structured payment schedule reflects HUDCO's commitment to maintaining timely financial obligations and investor confidence. The company aims to leverage these debentures to support its growth initiatives and sustain its market presence.

The issuance of these NCDs highlights HUDCO's strategic approach to capital acquisition, aiming to bolster its financial resources without compromising its asset base. The move is seen as a part of its broader strategy to optimise capital allocation and enhance financial stability.

HUDCO has not reported any delays or issues related to interest or principal repayments, reinforcing its image as a reliable investment vehicle within the market. The decision to raise funds through NCDs aligns with HUDCO's long-term vision of sustainable development and financial prudence.