Housing and Urban Development Corporation (Hudco) raised about R570 crore through tax-free bonds in just two days due to strong demand from retail investors and high-net-worth individuals.
HNIs bought R281 crore worth of these bonds while retail customers bought R218 crore. The demand from qualified institutional investors (QIB) and companies has been muted so far with just R5 crore in investment seen from QIBs and R69 crore from corporates. Hudco plans to raise up to R4,809 crore through the public issue of tax-free bonds.
The issue size is R750 crore with an option to retain up to R4,809 crore. The issue opened on September 17 and is expected close on October 14.
According to bankers, Hudco’s issue will be largely taken up by HNIs and retail customers as the coupon rate is more attractive compared to Rural Electrification (REC) and India Infrastructure Finance Co (IIFCL). The higher coupon is on account of Hudco’s lower rating compared to other issuers. Hudco is rated AA+ by both CARE and India Ratings.
The bonds have a coupon rate of 8.14% for 10 years, 8.51% for 15 years and 8.49% for 20 years for corporates, qualified institutional buyers and high-net-worth individuals applying for bonds more than R10 lakh.