Hudco to raise up to Rs 4,685 cr via tax-free bonds

Housing and Urban Development Corporation (Hudco) today said it will raise up to Rs 4,685 crore through a public issue of tax-free bonds.

The company said it had yesterday filed a draft prospectus for the same with the National Stock Exchange (NSE), where these bonds would be listed.

"The company proposes to make a public issue of tax-free bonds of face value of Rs 1,000 each in the nature of secured, redeemable, non-convertible debentures. Aggregating up to Rs 4,684.72 crore," Hudco said in a statement.

These bonds would have tax benefits for subscribers under the Income Tax Act, 1961.

Hudco is a public sector firm fully-owned by the government for financing of housing and urban infrastructure activities in India.

"The Finance Ministry has given us approval for raising Rs 5,000 crore through tax-free bonds. We have raised Rs 315 crore through private placement of bonds. Now we are coming up with a public issue of tax-free bonds to raise up to Rs 4,685 crore," Hudco Senior Executive Director RK Khanna told PTI.

The funds would be utilised in project financing, he said, adding that the public issue of tax-free bonds is likely to be launched by the month-end.

"In the 2010-11 fiscal, we sanctioned Rs 19,762 crore and out of that, Rs 5,293 crore was in housing and about Rs 14,500 crore in infrastructure projects. We are targeting the sanction of Rs 24,000 crore this fiscal and out of that, 25% would be toward housing schemes," he said.

The lead managers of the issue are Enam Securities and SBI Capital Markets. The trustee for the bondholders is SBICAP Trustee Company.