To maintain its competitive edge, the public sector undertaking is also actively considering to slash its interest rates to individual home loan seekers.

``Of the Rs 9000 crore receivables during 1998-99, the corporation plans to privately place Rs 1100 crore in the current fiscal to the financial institutions.'' Hudco's director, finance, S Sundereshan told The Financial Express.

Of this, Rs 785 crore will be placed with the public sector companies in the shape of tax-free bonds and Rs 315 crore as taxable bonds with a maturity period ranging between five to seven years.

Hudco has decided to enter securitisation business in order to receive better financial benefits. The targets during the current fiscal has been pegged at Rs 1000crore. The activity primarily relates to securitisation of loans concerning ongoing projects and restricted to infrastructure projects only.

The corporation will introduce a special purpose vehicle to finance infrastructure projects under which the borrower would be asked to issue bonds which then be subscribed by the corporation, Sundereshan said.The initiative will help the corporation to avail benefits under section 10(23) G of income tax Act whereby it would be exempted from tax on the interest income.

Besides, these papers could be off-loaded in the secondary market making additional liquidity available to the company for investment purposes, he said. ``We shall be cutting our lending rates by half a per cent for certain amount categories of loans soon, Sundreshan said.

The reduction on interest may be extended to the individual loan seekers up to an amount of Rs 5 lakh and above.