NHB decides early closure of tax-free bonds issue

The issue was oversubscribed on the first day at Rs 1,252 crore

The tax free bonds of National Housing Bank (NHB) have been over-subscribed on the first day of issuance at Rs 1,252 crore, and has decided early closure of the issue today.

This was the second tranche of NHB to issue tax free bonds with base size of Rs 250 crore with an option to retain over-subscription up to shelf limit of Rs 1,000 crore in the current financial year.

"The issue was oversubscribed on the first day itself, with the Bank receiving bids for an amount of Rs 1,252 crore in all the four categories as against the total issue size of Rs 1,000 crore.

"Consequently, the Bank decided to exercise early closure of the Public issue and announced closure of the issue on 11th March 2014," NHB said in a release today.

The public issue of NHB tax free bonds opened on March 7, 2014 and was scheduled to close on March, 18.

This was the second time in a row that NHB tax free bonds have been over-subscribed on the first day of issue.

The first tranche for 2013-14 was opened on December 30, 2013 for an amount of Rs 1,000 crore with green shoe option of Rs 1,100 crore.

As per government decision, the authorised amount to issue tax free bonds by NHB during 2013-14 was revised from Rs 3,000 crore to Rs 4,000 crore.