HUDCO plans to raise Rs 286 cr via tax free bonds

State-owned Housing and Urban Development Corporation plans to raise Rs 285.8 crore through the third tranche of tax-free bonds from tomorrow.

The Finance Ministry had allowed HUDCO to raise Rs 5,000 crore through bonds in the current financial year, ending March 31. It has raised Rs 4,714 crore so far.

"We are coming out with a public issue of tax free bonds to raise the balance amount of Rs 285.8 crore before end of this fiscal. The tranche-III issue would open from tomorrow," a senior HUDCO official said.

The basic size of the issue is Rs 75 crore with an option to retain over-subscription up to Rs 285.8 crore. The issue would close on March 19.

In August, the company raised Rs 190.8 crore via private placement of bonds with institutional investors.

HUDCO raised Rs 2,370 crore from the first tranche of tax- free bonds launched in September. Another Rs 2,153.39 crore was garnered from the second tranche in December.

For Qualified Institutional Buyers (QIBs), Corporates and High Networth Individuals (HNIs) applying for bonds more than Rs 10 lakh, the bonds bear a coupon rate of 8.29 per cent per annum for 10 years, 8.73 per cent for 15 years and 8.71 per cent for 20 years.

For retail individual investors applying for bonds up to Rs 10 lakh, the coupon rate would be 8.54 per cent for 10 years, 8.98 per cent for 15 Years and 8.96 per cent for 20 years.

Hudco will utilise the funds to finance the government's housing and urban infrastructure projects, working capital requirements, augmenting the company's resource base and other operational requirements.

During the current fiscal, HUDCO has disbursed loan amount of Rs 5,826 crore. Loan sanctioned during the year amounted to Rs 17,168 crore.

The company had posted net profit of Rs 700 crore on revenue of Rs 2,923 crore during the previous financial year. It sanctioned projects worth Rs 23,000 crore and disbursed Rs 6,000 crore in last fiscal.