BackNHB’s `2,100 crore tax-free bonds subscribed 2.08 times
Objective of the issue is to mobilize long-term resources to provide financial assistance for affordable housing
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New Delhi: National Housing Bank’s (NHB) ₹ 2,100 crore tax-free bond was subscribed 2.08 times on its opening day Monday.
“The issue was oversubscribed in all the four categories including QIBs (qualified institutional buyers), corporates, and retail investors on the first day itself. The issue was oversubscribed by 2.08 times the issue size including the option to retain up to shelf limit of ₹ 2,100 crore," NHB chairman and managing director R.V. Verma said here.
The base issue size is ₹ 1,000 crore with an option to retain over-subscription up to ₹ 2,100 crore.
NHB, the regulator for housing finance companies, got bids worth ₹ 4,366.43 crore on the maiden day. The issue is scheduled to close on 31 January 2014. The bonds are proposed to be listed on 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 QIBs, corporates and high net worth individuals.
The objective of the issue is to mobilize long-term resources to provide financial assistance for affordable housing. The funds will also help NHB to implement some important schemes and serve niche markets such as housing finance for women, long-term fixed-rate products and low-income housing schemes, Verma said.
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