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| HUDCO chairman VP Baligar |
THE state-owned Miniratna
company Housing and Urban Development Corporation (HUDCO) on Monday said it mopped up Rs 1,748 crore so far through its public issue of tax-free bonds, and the issue has so far been oversubscribed over...
two times. The issue size is Rs 750 crore with an option to retain over-subscription up to Rs 4,809.20 crore. Earlier, VP Baligar, chairman and managing director of the firm told reporters that the company would like to "raise the entire amount of Rs 4,810 crore before issue closes.” The bonds have been assigned a rating of CARE AA+ by Credit Analysis and Research, while India Ratings and Research has assigned a rating of IND AA+ to the Bonds.
HUDCO’s bond issue hit the market on September 17 and will close on October 14.
“The funds raised through this issue will be utilised for lending and working capital requirements, augmenting the resource base of HUDCO and other operational requirements,” said a senior HUDCO official. This is the first public issue of tax-free bonds by the firm this fiscal. The company in last fiscal collected about Rs 2,400 crore.
two times. The issue size is Rs 750 crore with an option to retain over-subscription up to Rs 4,809.20 crore. Earlier, VP Baligar, chairman and managing director of the firm told reporters that the company would like to "raise the entire amount of Rs 4,810 crore before issue closes.” The bonds have been assigned a rating of CARE AA+ by Credit Analysis and Research, while India Ratings and Research has assigned a rating of IND AA+ to the Bonds.
HUDCO’s bond issue hit the market on September 17 and will close on October 14.
“The funds raised through this issue will be utilised for lending and working capital requirements, augmenting the resource base of HUDCO and other operational requirements,” said a senior HUDCO official. This is the first public issue of tax-free bonds by the firm this fiscal. The company in last fiscal collected about Rs 2,400 crore.
HUDCO
is a techno-financial institution engaged in the financing and promotion of
housing and urban infrastructure projects throughout India. The bonds have a
coupon rate of 8.14 percent for 10 years, 8.51 percent for 15 years and 8.49 percent
for 20 years for companies, qualified institutional buyers and high net worth
individuals (HNI) applying for bonds more than Rs 10 lakh. Retail investors will
get 25 bps higher rates in all the tenures.
The finance ministry has allowed
Hudco to raise Rs 5,000 crore through tax-free bonds. The finance ministry has
allowed 13 PSUs to raise Rs 48,000 crore through tax-free bonds in 2013-14 to
meet their infrastructure investment requirements.
What’s on offer?
What’s on offer?
There are three series on offer and retail investors get a
25 basis points enhanced interest rate. For a retail investor applying up to Rs
10 lakh, the applicable annual coupon rate is 8.39 percent for 10-year
maturity, 8.76 percent for 15-year maturity and 8.74 percent for 20-year
maturity. In case the application exceeds Rs 10 lakh, the individual falls in high
net worth individual (HNI) category, the respective coupon rates for will be 8.14
percent, 8.51 percent and 8.49 percent.
Advantage of tax free bonds
Advantage of tax free bonds
The main advantage of the bonds is that the interest earned
is not taxable. One may invest as little as Rs 5,000, and as the bonds are
proposed to be listed on the BSE so one may have an option to exit through the
secondary market.
HUDCO reported revenues of Rs 2,924 crore in 2012-13, 5 percent
higher than in the previous year. The company’s profits rose 11 per cent in
2012-13 to Rs 701 crore. Net non-performing assets declined by 0.6 percentage
points to 1.44 percent last fiscal.
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