Housing and Urban Development Corporation (HUDCO) saw a subscription of about Rs 172 crore on the first day of its public issue of tax-free bonds through which the company aims to raise up to Rs 5,000 crore.
"We have received excellent response. On Day One, we have been able to mobilise about Rs 172 crore," HUDCO Chairman and Managing Director V P Baligar told PTI.
HUDCO, a financial institution that provide long-term finance for housing and urban infrastructure projects, got a subscription of about Rs 110 crore from retail investors and nearly Rs 60 crore from HNIs.
Baligar said the company expects to raise the entire Rs 5,000 crore by January 22, when the issue closes.
"We have got a good response from retail investors as coupon rates are higher for them," he said, adding allotment would be done on the basis of first-come-first-serve basis.
For retail investors, the bond issue carries a coupon rate of 8.01 per cent per annum for 15 years maturity period and 7.84 per cent for 10 years. An investment up to Rs 10 lakh would qualify under retail category.
The coupon rate for qualified institutional buyers (QIB), corporates, high-net worth individuals has been fixed at 7.51 per cent per annum for 15 years and 7.34 per cent per annum for 10 years.
"HUDCO has launched its tax-free bond issue to raise up to Rs 5,000 crore for lending to housing and core infrastructure projects. The yields are attractive and we are confident that issue will be a success," Minister for Housing and Urban Poverty Alleviation Ajay Maken told reporters here.
Highlighting the features of the issue, Baligar said the company is offering 15 basis points more than other issuers which have recently launched their tax-free bonds.
Foreign institutional investors and Non-resident Indians can also invest in the tax free bond issue. The face value of each bond is Rs 1,000. The bonds will be listed on the NSE.
The company posted a net profit of Rs 630.33 crore over a gross income of Rs 2,778.63 crore in 2011-12 fiscal.