HUDCO Joins Forex Swap Bandwagon as RBI Picks Currency Risk Tab
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Housing
and Urban Development Corporation (HUDCO) plans to raise $1 billion (around ₹9,500 crore)
in foreign debt using the RBI’s newly announced forex swap facility.
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HUDCO
is among the first public sector entities to announce plans to utilize the
scheme.
·
The
RBI facility allows borrowers to swap foreign currency borrowings with the
central bank at a concessional rate, reducing hedging costs.
·
The
scheme is expected to lower borrowing costs by 1–1.5 percentage points, making overseas
funding more attractive.
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HUDCO
has already secured funding lines worth approximately $1 billion and is
engaging with lenders in the United
States, Japan, and the Eurozone.
·
The
company plans to mobilize around ₹70,000
crore during FY 2026-27 to support lending and business
expansion.
·
HUDCO
raised ₹67,503 crore
in FY 2025-26 and had a loan book of approximately ₹1.65 lakh crore
as of March 2026.
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Beyond
financing, HUDCO is expanding its role in project planning, technical assistance, and advisory
services for states and urban local bodies.
·
Through
its Urban Invest Window (UiWIN) initiative, HUDCO is supporting
climate-resilient infrastructure, sustainable urban development, and bankable
projects.
·
The
corporation is focusing on Tier-2
and Tier-3 cities, transit-oriented development, multimodal
connectivity, and planned urban expansion.
·
HUDCO
noted a growing shift from grant-based infrastructure projects toward financially sustainable projects with
stronger revenue potential and greater private-sector participation.
Hudco is one of the first to disclose plans
to raise funds under the forex swap facility that the RBI announced earlier
this month. It allows banks and public sector underkings
to raise foreign debt and swap that with the central bank at a concessional
rate. This facility aimed at attracting foreign currency inflows and supporting
the rupee, cuts the currency hedging cost for the borrowers, offer savings of
1-1.5%.
“We have tied up funding lines of
approximately $1 billion, which may be accessed under the facility, subject to
regulatory approvals and market condition,” Kulshrestha said. The company has
already engaged with multiple entities in the US, Japan and the eurozone for
raising the fund, he added.
“Recent policy initiatives by the
Reserve Bank of India and the government have created a conducive environment
for both domestic and overseas fundraising,” he said.
Hudco plans to mobilise
around Rs. 70,000 crore during the current financial
year to support lending and business growth requirements, against Rs.67,503.22
crore it raised in fiscal 2026.
The organization that provides long-term
financing for housing and urban infrastructure projects has a loan book of
Rs.1.65 lakh crore as of end-March 202
Widening Scope
Going beyond Financing, Hudco has begun working with states for project planning
and preparation. The lender is also helping urban local bodies promote
climate-resilient infrastructure solutions, strengthen urban planning and
support projects that enhance environmental sustainability.
“We provide technical assistance,
capacity building and advisory support for developing bankable, sustainable and
implementation-ready projects through the Urban Invest Window (UiWIN) initiative,” Kulshrestha said, adding there is an
increasing focus on ties-2 and tier-3 cities, transitoriented
development, multimodal connectivity and planned urban expansion.
According to the Hudco
chairman, there is a clear shift from grant-driven infrastructure creation
towards financially sustainable and bankable projects with stronger
revenue-generation potential and greater private sector participation.