HUDCO plans to issue Rs 17.88 billion worth tax-free bonds

State-owned Housing and Urban Development Corporation plans to raise Rs 17.88 billion through the issuance of tax-free bonds. Under the offer, a retail investor can earn up to 7.69 per cent by subscribing to the 15-year bonds. The paper, with a 10-year maturity, offers a coupon rate of 7.29 per cent. In January 2016, the AAA-rated company mopped up Rs 17.13 billion through a similar bond sale which witnessed a 3.61 times subscription on the opening day of the issue. Tax is not payable on the interest earned on such bonds, making them more attractive than taxable debt instruments. Retail investors can subscribe to up to 40 per cent of the issue, while the limit for companies, high net worth individuals and qualified institutions is set at 20 per cent each.

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