HUDCO raises Rs 1,905 crore at 6.98% amidst volatile bond market

Housing and Urban Development Corporation Ltd. (HUDCO) has raised Rs 1,905 crore through a 7-year bond issuance on Wednesday. A company statement said the raise was at 6.98% coupon rate. “The achievement stands out as the broader market faced unexpected yield pressures,” HUDCO said on Thursday, adding this is despite expectations of softer rates following the RBI’s recent monetary policy actions.

Commenting on the fund raise, HUDCO chairman Sanjay Kulshrestha, said the public sector undertaking (PSU) is committed to optimising costs “with an objective to ensure creation of bankable, sustainable and resilient infrastructure.”

Highlighting the market volatility, HUDCO said corporate bond yields moved upward despite the 25-basis points Repo Rate cut and announcement of Rs 1 lakh crore Open Market Operations (OMO) purchases, amid global uncertainties. “Reflecting this sentiment, two PSU issuers cancelled their planned bond issuances on December 9, after receiving levels that did not meet expectations,” HUDCO said adding secondary market trades for 7-year PSU papers were recorded at elevated levels of 7.08–7.10%, underscoring the prevailing strain in the market.


“Against this backdrop, HUDCO’s ability to secure funding nearly 10 bps below secondary market levels underscores the company’s strong credit profile, investor confidence, and disciplined liability management,” the company said.