HUDCO Sets ₹500-Billion Loan Disbursal Target For 2025-26

Housing & Urban Development Corp. Ltd. aims to disburse loans worth ₹500 billion in 2025-26, up from ₹400.38 billion in the previous year, Chairman and Managing Director Sanjay Kulshrestha said at a post-earnings press briefing.

The company expects its total loan book to grow to ₹1.5 trillion by March 31, 2026, from ₹1.27 trillion at the end of 2024-25. Over the next few years, HUDCO is targeting an annual growth rate of over 25%, the management said.

As part of its broader lending strategy, the company plans to disburse ₹1 trillion under the government's Pradhan Mantri Awas Yojna 2.0 over the next five years. HUDCO also intends to expand into infrastructure lending, including for ports and airports.

Lower Cost Of Funds, Stable Asset Quality

The company expects its cost of funds to ease to 6.50–6.60% by the end of 2025-26 from 6.75% currently, helped by potential rate cuts from the Reserve Bank of India. While the net interest margin fell to 3.36% in 2024-25 from over 4% a year ago, the management aims to keep it above 3% going forward.

HUDCO said it has reported no fresh slippages in the past two years and is targeting a net NPA ratio of 0% in the next 18 months. As of March 31, net NPAs stood at 0.25%, largely due to legacy exposures.

₹650 Billion Fundraising Plan For 2025-26

The lender plans to raise up to ₹650 billion this year through a mix of domestic and overseas routes, with around ₹150 billion—or $2 billion—expected to come from foreign markets, said Director (Finance) Daljeet Singh Khatri.

HUDCO is also set to issue 54EC capital gains bonds for retail investors and hopes to raise ₹10 billion through the issue. In June, it plans to raise ₹50 billion via zero coupon bonds, which the company expects to be 40 basis points cheaper than other domestic funding options.

In July–September, HUDCO is looking to raise $500 million via yen-denominated bonds, citing a lower landed cost of 6.20% compared with 6.80% for domestic borrowings. The company may also explore up to $250 million in yen-denominated social bonds later in 2025-26 at around 6.25%, Khatri said.