Cos buy tax-free bonds as retail participation dips
Housing and Urban Development Corp’s (Hudco) has raised about R1,351 crore in tax-free bonds so far having extended the sale to February 1. Hudco’s first tranche was pegged at R750 crore with an option to retain up to R5,000 crore. Hudco is offering 12-13 bps higher coupon than others as it is a lower-rated paper and is getting more retail subscription than the rest. Higher coupon has also attracted more high net worth individuals, merchant bankers said.
In all, five government-backed infrastructure companies have so far been able to raise just R8,042 crore or about a-fourth of the amount they are targetting through tax-free bonds with investors not enticed by the coupon rates being offered. The five companies are hoping to raise R32,176.4 crore.
India Infrastructure Finance Company (IIFCL) raised R2,850 crore, the highest amount picked up among three issues that have already closed, as it was able to bring private and public banks to buy the bonds. However, IIFCL too fell short of its target to raise R9,200 crore through the issue.
Rural Electrification Corp (REC), whose bond issuance was open in December, raised about
Be the first to comment.