HUDCO targets over USD 3 billion via Reserve Bank of India (RBI) concessional forex swap window to cut borrowing costs

Key facts

• Housing and Urban Development Corporation (HUDCO) has raised USD 2 billion under the RBI's concessional forex swap window, with another USD 500 million tied up and USD 1 billion under negotiation, targeting total mobilisation of slightly over USD 3 billion before the window closes on December 31, 2026.
• The effective borrowing cost after hedging for funds raised under the RBI window is around 6.5-6.75%, and HUDCO expects around Rs 35,000 crore of its total borrowings at this cost.
• HUDCO raised USD 1.742 billion equivalent through five-year external commercial borrowings (ECBs) in H1 FY27 at a weighted average cost of 6.16%.
• HUDCO's overall cost of funds stood at 7.07% in H1 FY27 versus 7.04% a year ago, with a yield on loans of 8.83%.
• HUDCO reported an interest spread of 1.76% and a net interest margin of 2.64% in H1 FY27; excluding Rs 20,000 crore of fully serviced Government of India bonds with around 40 basis points spread, the spread stood at 1.96% and NIM at 2.93%.
• HUDCO raised its marginal cost of funds-based lending rate (MCLR) by 15 basis points after two years, with around Rs 20,000 crore of loans expected to be reset in the second half of FY27.
• HUDCO has sanctioned around Rs 9,000 crore of public-private partnership (PPP) projects, including the Dharavi redevelopment project in Mumbai, road and highway projects and a renewable energy project, with disbursements expected to begin in Q3 FY27.
• The Reserve Bank of India (RBI) has classified HUDCO as an upper-layer non-banking financial company (NBFC), entailing additional compliance requirements and monitoring of exposure limits.