NHB to request govt for Rs 5,000 cr tax-free bonds next fiscal

National Housing Bank, the regulator for housing finance companies, is planning to request government to grant permission for issuance of tax-free bonds worth Rs 5,000 crore in the next fiscal.
"We would be requesting for at least Rs 5,000 crore for the next fiscal," National Housing Bank (NHB) Chairman and Managing Director R V Verma told PTI.
NHB is in the process of preparing Budget demands for the next fiscal and will shortly submit its demands, he said.
In the last two years, a number of institutions were allowed to issue tax free bonds. They raised Rs 30,000 crore in 2011-12 and permitted to raise about Rs 25,000 crore in 2012-13.

During the current fiscal, the government allowed some institutions to issue tax free bonds up to a total sum of 50,000 crore.
Currently, NHB is in the process of raising about Rs 2,100 crore by issuing tax-free bonds.

The base issue size is Rs 1,000 crore with an option to retain over-subscription up to Rs 2,100 crore.
The issue will open on December 30 and is scheduled to close on January 31, 2014. The bonds are proposed to be listed on the National Stock Exchange.
NHB, was permitted to issue tax-free bonds of up to Rs 3,000 crore during the current financial year. Of this, NHB had already raised Rs 900 crore through a private placement in August.

The bonds of Rs 5,000 each will be issued in tenors of 10, 15 and 20 years.
For retail investors, the coupon rate would be 8.51 per cent, 8.88 per cent and 9.01 per cent payable annually for 10, 15 and 20 years, respectively, for bonds up to Rs 10 lakh.
Interest rates of 8.26 per cent, 8.63 per cent and 8.76 per cent are payable annually for 10, 15 and 20 years, respectively, for qualified institutional buyers, corporates and high net worth individuals.