New Delhi: Housing and Urban Development Corporation Limited (HUDCO), the state-owned enterprise specializing in housing and infrastructure financing, has withdrawn its plan to raise up to Rs 3,000 crore through non-convertible debentures (NCDs). The move comes due to higher-than-expected coupon rates, making the proposed bond issue financially unviable.
Bond Allotment Committee Meeting Cancelled
In a regulatory filing on Thursday, HUDCO announced the cancellation of its Bond Allotment Committee meeting, which was scheduled for August 29. The meeting was intended to approve the issue and allotment of unsecured, taxable, redeemable, non-convertible, non-cumulative debentures of face value Rs 1 lakh each (Series-E 2025). However, the committee meeting was called off following the decision to withdraw the bond issue.
The company clarified that no allotment of securities had been made following its initial announcement, so investors remain unaffected by this withdrawal.
Initial Bond Issue Plan Part of Larger Borrowing Programme
HUDCO had announced on August 25 its intention to raise Rs 3,000 crore through a private placement of NCDs. This bond issue was part of a larger borrowing program totaling Rs 65,000 crore approved for the financial year 2025-26. The withdrawal signals the company’s cautious approach amid rising coupon rates in the bond market.
HUDCO’s Strong Financial Performance
Despite the withdrawal, HUDCO continues to demonstrate robust financial health. For the first quarter of FY26, the company reported a 13% year-on-year rise in consolidated net profit, reaching Rs 630.23 crore compared to Rs 557.75 crore in the same period last year. Total income also increased substantially to Rs 2,945.47 crore from Rs 2,197.19 crore.
The company has declared its first interim dividend of Rs 1.15 per equity share for FY 2025-26, reflecting confidence in its ongoing profitability and financial management.
What This Means for Investors
HUDCO’s decision to withdraw the bond issue due to higher coupon rates highlights the current challenges in the debt market, where borrowing costs have risen. Investors looking forward to the NCD issuance will need to wait for future opportunities, as HUDCO continues to monitor market conditions before proceeding with new debt instruments.
About HUDCO
Housing and Urban Development Corporation Ltd. (HUDCO) is a Government of India-owned public sector enterprise under the Ministry of Housing and Urban Affairs (MoHUA). Established in 1970, HUDCO primarily focuses on financing housing and urban infrastructure development projects across India.
Read also: HUDCO Signs MoU with MoHUA for FY 2025-26, Targets ‘Excellent’ Performance Benchmarks
