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To reduce overall financing costs, Housing and Urban Development Corporation (HUDCO) is gearing up to raise funds from the Japanese market through external commercial borrowing (ECB) next month. The plan aims to secure funds at a competitive rate of 6.5-7%, a significant drop from their current borrowing cost of approximately 7.5%. Sanjay Kulshrestha, the Chairman and Managing Director of HUDCO, revealed the corporation's intention to cut down on borrowing expenses to enhance the sustainability of its infrastructure projects.
HUDCO, with a current loan book of around Rs 80,000 crore, is eyeing a substantial expansion to Rs Rs 1.5 lakh crore by 2026. External commercial borrowings are expected to play a pivotal role in achieving this ambitious target while simultaneously lowering the overall cost of financing. Kulshrestha emphasised the importance of securing low-cost funding for infrastructure projects, emphasizing that it contributes to long-term sustainability.
While details regarding the quantum of funds to be raised were not disclosed, Kulshrestha highlighted ongoing efforts to fine-tune the plan. The corporation is actively studying state plans, capital expenditure, infrastructure initiatives, and budgets to ensure a well-informed and strategic approach. HUDCO's proactive approach involves forming Memoranda of Understanding (MoUs) with states, focusing on specific projects to ensure a well-coordinated and efficient expansion strategy.
Moreover, HUDCO is making an appeal to the government for a priority sector or development finance institution status, which would help it access financing at concessional rates. Kulshrestha expressed confidence in HUDCO meeting its sanction target of Rs 150,000 crore for the fiscal year 2023-24 and anticipated a positive bottom line by year-end.
Despite economic uncertainties and the possibility of a change in the Reserve Bank of India's monetary policy stance, Kulshrestha remains optimistic that costs will decrease in the coming months. He also addressed the issue of real estate prices, asserting that market-determined rates reflect realistic values.
As HUDCO continues its financial endeavours and strategic collaborations, the corporation's moves are closely watched in the evolving landscape of housing and infrastructure finance.
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