Hudco Eyes $1 Billion Foreign Funding for India Infra Projects Amid Strong Financials

Industrial Goods/Services

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Updated on 16 Nov 2025, 10:39 am

Housing and Urban Development Corporation Ltd (Hudco), a state-owned infrastructure financing institution, is actively seeking to raise about $1 billion in foreign funding to support various infrastructure projects across India. The company is in advanced discussions with major multilateral development banks and institutions. Specifically, it is negotiating a loan of $500 million with the Asian Development Bank (ADB) and another $200-300 million with the Asian Infrastructure Investment Bank (AIIB). Additionally, Hudco is in advanced talks with KfW, Germany's state-owned development bank, to raise $200 million. The company expects to finalize these fundraising efforts within the current financial year.

Sanjay Kulshreshta, Chairman and Managing Director of Hudco, stated that this foreign capital infusion will not only diversify the company's resource mobilization strategies but also contribute to lowering the overall cost of funds. This makes financing more accessible and efficient for infrastructure development.

Besides foreign funding, Hudco is also leveraging domestic instruments. The company has been authorized by the government to issue 54 EC Capital Gain Bonds and has already mobilized ₹50 crore through this route, with a coupon rate of 5.39%. Hudco aims to mobilize an additional ₹150 crore from these bonds by the end of the current financial year.

Financially, Hudco has demonstrated robust performance. For the first half ended September 2025, its loan sanctions surged by 22% to ₹92,985 crore, up from ₹76,472 crore in the corresponding period of the previous year. Loan disbursements also saw a healthy increase, rising to ₹25,838 crore from ₹21,699 crore in H1 FY25.

Furthermore, Hudco is enhancing its asset quality. The company is targeting net zero Non-Performing Assets (NPAs) within the next 15 months, driven by its focus exclusively on investment-grade projects. Gross NPAs have declined to 1.21% as of September 2025, down from 2.04% a year earlier. Net NPAs have also fallen significantly to 0.07% from 0.31% in the same comparative period.

Impact This news has a positive impact on Hudco's financial standing and its capacity to fund critical infrastructure. The substantial foreign capital inflow is beneficial for India's infrastructure sector and economy. Investors are likely to view this positively, potentially boosting confidence in the company's stock. Impact rating: 7/10.

Difficult Terms: Multilateral development banks: International financial institutions established by multiple countries to provide financing and advice for development projects. Examples include the World Bank, ADB, and AIIB. On-lending: The process where a financial institution borrows funds from a wholesale lender and then lends those funds to end-users or retail borrowers. 54 EC Capital Gain Bonds: Investment instruments allowed under Section 54EC of the Income Tax Act, 1961. They enable individuals to save long-term capital gains tax by investing the sale proceeds of certain assets into these specified bonds. Coupon rate: The annual interest rate paid on a bond to its bondholder, expressed as a percentage of the bond's face value. Loan sanctions: The official approval by a financial institution for a loan request, indicating the amount and terms under which the loan will be provided. Loan disbursements: The actual act of releasing the approved loan funds to the borrower. Non-Performing Assets (NPAs): Loans and advances for which the principal or interest payments remain overdue for a specified period (e.g., 90 days). Gross NPAs: The total sum of all non-performing loans before any deductions for provisions or write-offs. Net NPAs: Gross NPAs minus any provisions made by the bank or financial institution against those loans.