HUDCO’s tax-free bonds receive good response on first day

By: | Published: January 28, 2016 12:49 AM

The public issue of Housing and Urban Development Corporation's (HUDCO) tax-free bonds received good response on Wednesday with investors bidding 3.61 times the issue size on the first day of subscription.

The public issue of Housing and Urban Development Corporation’s (HUDCO) tax-free bonds received good response on Wednesday with investors bidding 3.61 times the issue size on the first day of subscription.

Against an issue size of Rs 1,711.50 crore, investors put in bids worth Rs 6,178.59 crore by evening, according to information provided by bond arrangers.

The maximum interest was seen from the NII category where investors bid 7.17 times the allotted quota of Rs 342.30 crore.

Qualified institutional buyers (QIB) bid for 3.52 times the allotted size of Rs 342.30 crore.

This was followed by the HNI category which put in bids at 3.25 times the allotted size of Rs 342.30 crore, while retail investors put in bids at 2.05 times the allotted size of Rs 684.60 crore.

HUDCO is offering coupon rates of 7.27% and 7.64% on its 10- and 15-year bonds, respectively, for retail individual investors. For all other categories, the company is offering 7.02% and 7.39% on its 10- and 15-year bonds.

Prior to this, National Highways Authority of India’s (NHAI) public issue of tax-free bonds had received reasonable response with investors having bid more than twice the issue size of Rs 10,000 crore on the first day of the subscription.

Tax-free bonds 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.

Meanwhile, ONGC Mangalore Petrochemicals is planning to come out with its debut bond issue and has called for a meeting with arrangers on Thursday, sources said.

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