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NHAI tax free bonds Issue Offer - Jan 2014 (Apply)

National Highways Authority of India (NHAI) Logo

We are witnessing spat of Tax Free bonds offer that evoked mixed response from investors. The last offer was from IRFCL that opened for subscription on January 06, 2014 and is still going on with lukewarm response. We have yet another offer from NHAI that opens tomorrow with better coupon rate. Details are as under:

NATIONAL HIGHWAYS AUTHORITY OF INDIA (NHAI) is coming out with a tax free bonds issue on 15.01.14. The bonds having face value of Rs. 1000 are to be applied for a minimum subscription of 5 bonds and in multiples of 1 bond thereof, thereafter. The core issue is for Rs. 1000 crore with a green shoe option to retain oversubscription of Rs. 2698.40 crore thus taking the total size of the issue to Rs. 3698.40 crore.

These bonds carries coupon rate of 8.25% to 8.75% and having tenure of 10 years and 15 years. For retail investors (category IV) it offers 8.52% for 10 years and 8.75% for 15 years. These bonds are rated CRISIL/AAA Stable, CARE/AAA and BWR/AAA Stable, indicating highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

The issue is lead managed by EDELWEISS FINANCIAL SERVICES LIMITED, A. K. CAPITAL SERVICES LIMITED, AXIS CAPITAL LIMITED, ICICI SECURITIES LIMITED, while Trustee to bond offer is SBICAP TRUSTEE COMPANY LIMITED, and registrar to the issue is KARVY COMPUTERSHARE PRIVATE LIMITED. The issue opens on January 15, 2014 and will close on or before February 05, 2014. Post allotment, the listing will be done on BSE and NSE. It will be allotted in demat and physical forms, but trading will take place only in demat form. The interest on these bonds will be paid on March 15 every year except the last interest payment along with the redemption amount. As known, the maiden offer from NJAI last year evoked excellent response with oversubscribing in first week itself, this time too it is expected to generate good response. As it offers better rate than ongoing IRFC tax free bonds that offers 8.48% and 8.65% for 10 and 15 years respectively to retail category.

Conclusion / Investment Strategy

Maximum investment recommended

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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2. Sachin shah     Link|December 16, 2015 8:12:32 PM
Worth there any grey market premium.. May give good returns..
1. SONMAYA     Link|January 16, 2014 9:48:10 PM
nhai tax free bond sub. by .90% on second day...may close within next week......