BackNHB to seek government permit to issue `5,000 crore tax-free bonds next fiscal
NHB is in the process of preparing budget demands for the next fiscal and will shortly submit them
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New Delhi: National Housing Bank (NHB), the regulator for housing finance companies, is planning to request government to grant permission for issuance of tax-free bonds worth ₹ 5,000 crore in the next fiscal.
“We would be requesting for at least ₹ 5,000 crore for the next fiscal," NHB chairman and managing director R.V. Verma told PTI. NHB is in the process of preparing budget demands for the next fiscal and will shortly submit its demands, he said.
In the last two years, a number of institutions were allowed to issue tax free bonds. They raised ₹ 30,000 crore in 2011-12 and permitted to raise about ₹ 25,000 crore in 2012-13.
During the current fiscal, the government allowed some institutions to issue tax free bonds up to a total sum of ₹ 50,000 crore. Currently, NHB is in the process of raising about ₹ 2,100 crore by issuing tax-free bonds. The base issue size is ₹ 1,000 crore with an option to retain over-subscription up to ₹ 2,100 crore. The issue will open on 30 December and is scheduled to close on 31 January 2014.
The bonds are proposed to be listed on the National Stock Exchange. NHB, was permitted to issue tax-free bonds of up to ₹ 3,000 crore during the current financial year. Of this, NHB had already raised ₹ 900 crore through a private placement in August.
The bonds of ₹ 5,000 each will be issued in tenors of 10, 15 and 20 years.
For retail investors, the coupon rate would be 8.51%, 8.88% and 9.01% payable annually for 10, 15 and 20 years, respectively, for bonds up to ₹ 10 lakh. Interest rates of 8.26%, 8.63% and 8.76% are payable annually for 10, 15 and 20 years, respectively, for qualified institutional buyers (QIB), corporates and high net worth individuals (HNIs).
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