State-owned Housing & Urban Development Corporation (HUDCO) has set a target to resolve its ₹2,000 crore stressed assets within the next 18 months, even as it prepares to deepen its role in India’s urban infrastructure ecosystem.
HUDCO Chairman and Managing Director Sanjay Kulshrestha said the organisation has achieved a provisioning coverage of 86% on these non-performing assets (NPAs), with no new additions over the last three years. “Despite ongoing litigation in forums like the NCLT and DRT, we are confident of complete resolution by September 2026,” he said. Alongside asset recovery, HUDCO is positioning itself as a comprehensive urban development enabler. Plans are underway to launch a dedicated ‘Urban Development Single Window Solution’ in partnership with multilateral financial institutions and development finance institutions (DFIs), Kulshrestha said. The initiative will be backed by a project management unit to assist states and urban local bodies (ULBs) in preparing detailed project reports (DPRs), securing clearances, arranging finance, and optimising system planning. HUDCO aims to scale up involvement in water supply, waste management, sewage, and drainage projects, while promoting public-private partnerships and building bankable infrastructure proposals.
“HUDCO is preparing to become a full-cycle project partner—from concept to execution—to support India’s growing urbanisation needs,” said Kulshrestha. On the funding side, HUDCO is focused on reducing capital costs. It has stepped up global fundraising via external commercial borrowings (ECBs), including yen-denominated loans from the Japanese market. Foreign currency loans currently account for 20% of the corporation’s borrowings, and this could rise to 25% depending on global conditions. The Centre has also allowed HUDCO to issue 54EC capital gains bonds, enabling the company to attract investment at lower costs. These bonds offer tax exemptions under the Income Tax Act for reinvestment of capital gains from immovable assets. HUDCO joins Power Finance Corporation and REC Ltd as one of the few entities permitted to issue them. “These instruments are already yielding results. Our weighted average borrowing cost has declined from 7.10% last year to 6.75%. We’re also preparing to tap zero-coupon bonds for added cost efficiency,” Kulshrestha said.
In FY25, HUDCO raised ₹51,000 crore in borrowings, taking its total outstanding debt to around ₹1 trillion. For FY26, it has raised the target to ₹65,000 crore to align with upcoming disbursement and infrastructure funding needs. As HUDCO marks its 55th year, the dual strategy of asset clean-up and infrastructure expansion signals its intent to emerge as a pivotal urban growth catalyst.
