The Housing and Urban Development Corporation Limited (HUDCO), a premier public sector enterprise under the Ministry of Housing and Urban Affairs, has announced its plan to raise ₹2190 crore by issuing unsecured, redeemable, taxable, non-convertible debentures (NCDs). This capital raising move is aimed at meeting long-term financing requirements for infrastructure development and housing finance projects.

Issue Size and Structure

The total size of the issue is ₹2190 crore, which is structured as follows:

• Base Issue Size: ₹500 crore

• Green Shoe Option: ₹1680 crore

This flexible structure allows HUDCO to raise additional capital over the base issue depending on investor demand, without requiring separate approvals.

Instrument Details

These NCDs are non-convertible, non-cumulative, and unsecured, indicating that they won’t convert into equity and do not have any backing of physical assets. Investors will receive interest on a non-cumulative basis, meaning the interest is paid periodically and not accumulated.

• Type of Security: Unsecured

• Tenure: 5 years

• Listing Exchange: BSE (Bombay Stock Exchange)

• Coupon Rate: 6.90% per annum

These bonds are attractive to investors seeking steady annual returns with minimal risk, especially considering HUDCO's government affiliation.

Redemption and Interest Payment Schedule

The bonds will be redeemed at par at the end of 5 years. Interest will be paid annually, with the following schedule:

• May 08, 2026

• May 08, 2027

• May 06, 2028

• May 06, 2029

• May 08, 2030

This clearly defined schedule provides predictability and transparency to investors.

No Security or Special Rights

The issue is unsecured, meaning no specific asset has been pledged as collateral for the debentures. However, HUDCO’s creditworthiness and its status as a government-owned entity provide strong assurance to investors.

• No special rights, privileges or interest are attached to these NCDs.

• There has been no default or delay in payment of principal or interest.

• There is no adverse comment or letter regarding the payment or performance from any regulatory authority.

No Preference Shares or Fresh Issue for Redemption

The issue does not include any redeemable preference shares, nor will redemption be made out of profits or any fresh issue. The structure ensures clean accounting and compliance with SEBI debt regulations.

Why This NCD Issue Matters

1. Boosts Affordable Housing and Infrastructure Finance

As a specialized financial institution, HUDCO plays a crucial role in funding urban infrastructure and affordable housing projects across India. This ₹2190 crore capital raise will further empower its ability to support state and central housing initiatives.

2. Investor-Friendly Fixed Return Instrument

With a 6.90% annual coupon, these NCDs offer a stable income source for investors in an otherwise volatile equity market. It becomes an attractive choice for conservative investors, pension funds, trusts, and other institutions.

3. Backed by a Government Entity

Being under the Ministry of Housing and Urban Affairs, HUDCO enjoys a strong sovereign backing. This boosts investor confidence and may result in over-subscription of the issue, especially by long-term debt investors.

Conclusion

This NCD issue by HUDCO represents a strategic move to mobilize long-term funds for vital infrastructure and housing development. Investors looking for government-backed, secure, and high-yield fixed income options will likely find this issuance appealing.

It aligns with India’s push toward urban growth and infrastructure expansion, and contributes to achieving the government’s vision of "Housing for All" and urban rejuvenation. With strong fundamentals, fixed returns, and a transparent structure, HUDCO’s ₹2190 crore NCD issue could attract strong market interest.

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