Good response to Nabard’s public issue of tax-free bonds

By: | Updated: March 10, 2016 12:56 AM

The public issue of tax-free bonds by National Bank for Agriculture and Rural Development (Nabard) was oversubsribed close to four times on the first day of the issuance, according to sources.

The public issue of tax-free bonds by National Bank for Agriculture and Rural Development (Nabard) was oversubsribed close to four times on the first day of the issuance, according to sources.

According to bond market participants, investors bid 3.96 times the notified amount of `3,500 crore taking the subscription amount to `13,871.54 crore.

The maximum interest was seen from the institutional buyers who subscribed 10.72 times the allotted quota of `525 crore. Corporates also showed considerable interest by subscribing 10.05 times the allotted quota of `525 crore. HNIs subscribed 4.05 times their allotted quota of `350 crore.

Retail investors, however, subscribed just 0.74 times the allotted quota of `2,100 crore on the first day of the issue.

Nabard is issuing two papers having tenures of 10 and 15 years. The 10-year bonds carry a coupon rate of 7.29% for retail investors and 7.04% for other categories. The 15-year bonds offer a coupon of 7.64% for retail investors and 7.35% for other categories.

The company had earlier raised `1,500 crore via private placement of tax-free bonds, according to market participants. NABARD was allocated a total quota of `5,000 crore to be raised through tax-free bonds for this fiscal year.

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