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HUDCO Tax Free Bonds - Dec 2013 (Apply)

Housing & Urban Development Corporation Limited Logo

Housing and Urban Development Corporation Limited (HUDCO) is issuing tax free Bonds with a face value of Rs. 1,000 each in the nature of secured, redeemable, non-convertible debentures having benefits under Section 10(15)(iv)(h) of the Income Tax Act, 1961, aggregating to Rs 500 crore with an option to retain oversubscription up to the Shelf Limit of Rs 2439.1995 crore.

The Minimum Application Size for the Issue is five (5) Bonds across all of the Series of Bonds and in multiples of one (1) Bond thereafter. The Bonds issued through the Issue carry a coupon rate of 8.51%, 8.58% and 8.76% payable annually for 10 years (Series 1A), 15 years (Series 2A) and 20 years (Series 3A), respectively for Qualified Institutional buyers (QIBs), Corporates and High Networth Individuals (HNIs) applying for bonds more than Rs. 10,00,000/- and 8.76% , 8.83% and 9.01% payable annually for 10 years (Series 1B), 15 years (Series 2B) and 20 years (Series 3B), respectively for Retail Individual Investors ('RIIs') applying for bonds upto Rs. 10,00,000/- The higher rate of interest, applicable to RIIs, shall not be available in case the bonds are transferred by RIIs to non retail investors (refer to Prospectus Tranche - II for details and other terms and conditions). The lead managers to the issue are Axis Capital Limited, Edelweiss Financial Services Limited, HDFC Bank Limited, Karvy Investor Services Limited and RR Investors Capital Services Private Limited. The debenture trustee for the bondholders is SBICAP Trustee Company Limited. Karvy Computershare is the registrar to the issue.

The Issue will open for subscription on December 2, 2013 and is scheduled to close on or before January 10, 2014. The Bonds under the Issue are proposed to be listed on the BSE. The Bonds have been assigned a rating of 'CARE AA+' by Credit Analysis & Research Limited while India Ratings and Research Private Limited (formerly Fitch Ratings India Private Limited) ('IRRPL') has assigned a rating of 'IND AA+' to the Bonds. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. It has already raised Rs 2,370 crore in the first tranche of tax-free bonds launched in September 2013.

The Bonds will be issued in both physical mode (other than to investors who are eligible QFIs as detailed in the Prospectus Tranche - II and who do not have a demat account) and dematerialized form (for all applicants). The Issue Price for all the Series is Rs. 1,000 per Bond.

Conclusion / Investment Strategy

Retail Investors can consider investment with longer tenure with higher coupon rate

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on December 12, 2019

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.


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