National Highways Authority of India’s (NHAI) public issue of tax-free bonds saw considerable response on Wednesday even as investors bid 2.76 times the notified amount of Rs 3,300 crore, according to information provided by bond arrangers by evening.
The highest subscription came from the corporates category at 6.6 times the allotted size of Rs 660 crore. This was followed by the institutional category which bid 2.8 times the allotted size of Rs 660 crore.
HNIs bid 2.08 times their allotted size of R660 crore, while retail investors bid 1.15 times the allotted size of R1,320 crore.
For the 10-year paper, NHAI offered a coupon rate of 7.29% for retail investors and 7.04% for all other categories.
For the 15-year paper, the company offered a coupon rate of 7.69% for retail investors and 7.39% for other categories.
NHAI’s previous public issue of tax-free bonds had also seen a reasonable response when investors had bid more than twice the notified amount of Rs 10,000 crore.
Tax-free bonds had made a comeback this fiscal after remaining absent in FY15 and seven companies have been permitted to raise a total of Rs 40,000 crore. Tax-free bonds were introduced in 2011-12 with an overall limit of Rs 30,000 crore to boost infrastructure spending.
In 2012-13, the limit was doubled to Rs 60,000 crore. However, companies just raised Rs 18,000 crore through these bonds which was way below the target. In FY14, the limit was kept at Rs 50,000 crore against which companies borrowed Rs 49,200 crore.