HUDCO Tax Free Bonds - Jan 2016 (Subscribe)

Housing & Urban Development Corporation Ltd. (HUDCO) is a techno-financial institution engaged in the financing and promotion of housing and urban infrastructure projects throughout India. Hudco has a pan-India presence through wide network of zonal, regional and development offices and occupies a key position in the GoI's growth plans and implementation of its policies for the housing and urban infrastructure sector. The company is again coming out with a tax free bond issue offer to mobilize funds for its financing activities.

HUDCO is offering secured, redeemable non-convertible debentures having a face value of Rs. 1000 each. This tax free NCDs are bearing coupon rates of 7.02% and 7.39% for 10 yrs and 15 yrs respectively for other then retail category and 7.27% and 7.64% for 10 yrs and 15 yrs for retail category. The base size of this offer is Rs. 500 crore with an option to retain over subscription up to the residual shelf limit of Rs. 1711.50 crore. Minimum application is to be made for 5 bonds and in multiple of 1 bond thereof, thereafter. These bonds are available under demat and physical mode, but trading will take place in demat mode only. The Net Issue Proceeds as raised through each of the Tranche are proposed to be utilized to finance the projects and/activities mainly relating to housing for EWS/ LIG categories during the current year and/over the years, and for such other purposes as may be permitted by Ministry of Finance, Government of India or any other authority, from time to time. 20% of total issue quota is reserved for QIBs, Corporates and HNIs each and the balance 40% for retail category. Post issue its debt equity ratio will stand enhanced from 3.02% to 3.66%.

These bonds are rated 'CARE AAA' by CARE and 'IND AAA' by IRRPL indicating highest degree of safety regarding timely servicing of financial obligations and carry very low credit risk. The issue opens for subscription on 27.01.16 and will close on or before 10.02.16. Post allotment, NCDs will be listed on BSE. Allotment will be done on first come- first served basis. On performance front, its top and bottom lines has been steadily reporting progress over the years with rising EPS. For FY 2015 its EPS stood at Rs. 388.45.

This issue is lead managed by Axis Capital Ltd, Edelweiss Financial Services Limited, ICICI Securities Ltd, SBI Capital Markets Ltd and RR Investors Capital Services Pvt Ltd. Karvy Computershare Pvt Ltd is the registrar and SBICAP Trustee Co. Ltd. is Trustee for the bondholders.


Conclusion / Investment Strategy

As the interest rates are set to cool down going forward, this offer with above 7% tax free returns for longer tenure worth considering.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Dec 13, 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.

Email: dilip_davda@rediffmail.com

The HUDCO NCD Jan 2016 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if HUDCO NCD Jan 2016 worth investing. The HUDCO NCD Jan 2016 Note sets the NCD expectations in systematic way which tells you if HUDCO NCD Jan 2016 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in HUDCO NCD Jan 2016 by providing NCD recommendations i.e. subscribe, avoid and neutral.


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