State-run Housing and Urban Development Corporation (HUDCO) on Wednesday announced the launch of its public issue of tax-free bonds that aims to mop up around Rs. 5,000 crore for lending to low-cost housing and urban infrastructure projects in the country.
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. ``HUDCO has launched its tax-free bonds 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 journalists at the launch function.
HUDCO chairman and managing director, V.P. Baligar said the company was offering 15 basis points more than other issuers which have recently launched their tax-free bonds. 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. Foreign institutional investors and Non-Resident Indians can also invest in the tax free bond issue, which would close on January 22. The face value of each bond is Rs 1,000.
Mr. Maken said this is second successive year government has permitted HUDCO to float tax-free bonds which shows the importance being given for the development of housing and core infrastructure in the country. ``We hope that this credit enablement measure will lead to quantum jump in the overall supply of affordable housing and core infrastructure services,’’ he stated. The funds proposed to be raised by HUDCO through this issue shall be utilised towards lending purposes, working capital requirements, augmenting the resource base of our company and other operational requirements,’’ he added.
