IRFC's bonds subscribed 2.4 times

IRFC has permission to raise upto Rs 10,000 cr through tax free bonds

Indian Railway Finance Corporations (IRFCs)’s tax-free bonds, worth Rs 4,532 crore, were subscribed 2.38 times the issue size on Tuesday, the first day of its issue.

The retail segment, which has 40 per cent reservation in issue, was subscribed 1.3 times, according to market sources.

The public issue of tax-free bonds has three options — 10 years, 15 years and 20 years.  The high networth individuals (HNI) segment was subscribed twice. The reservation for this category is 25 per cent.

Ajay Manglunia, head of fixed income at Edelweiss Securities, said retail investors want to invest in tax-efficient instruments of long duration.

Other two segments are corporates and qualified institutional buyers (QIBs)which  have reservation of 20 per cent  and 15 per cent of the issue respectively.  IRFC, an arm of Indian Railways, has permission to raise up to Rs 10,000 crore through tax-free bonds.

The government has given permission to a few government-owned enterprises, including NTPC, PFC, REC,  HUDCO and NHAI to raise up to Rs 40,000 crore via tax-free bonds.