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HUDCO Tax Free Bonds Tranche 2 – Dec 2013 – Details

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Housing and Urban Development Corporation Limited (HUDCO) has come out with its 2nd tranche of tax free bonds of face value Rs 1000 each aggregating to Rs 500 crore with an option to retain oversubscription up to the shelf limit of Rs 2439.19 crore.

The company had already raised R2,370 crore in the first tranche of tax-free bonds launched in September. Coupon rate in 2nd tranche of bonds are higher than those offered in 1st tranche.

 The issue will open for subscription on December 2, 2013 and is scheduled to close on January 10, 2014.
CARE has given credit rating of ‘CARE AA+’ while IRRPL has given ‘IND AA+’.
HUDCO Tax Free Bonds –  Dec 2013 (Tranche 2)
Details Series 1 Series 2 Series 3
Tenor 10 Years 15 years 20 years
Interest Paid Annual Annual Annual
Coupon Rate 8.76% 8.83% 9.01%
Effective Pre-Tax Yield
(30% tax slab)
12.68% 12.78% 13.04%
Effective Pre-Tax Yield
(20% tax slab)
11.03% 11.12% 11.35%
Effective Pre-Tax Yield
(10% tax slab)
9.77% 9.84% 10.04%
Minimum Application Rs 5000
Maximum Application Rs 10 lacs ( Retail)
Issue Opens on 02-Dec-13
Issue Closes on 10-Jan-14

About the Company

HUDCO is a public sector company, under the Ministry of Housing & Urban Poverty Alleviation (MoHUPA). It has been a key partner with the government in building assets for the nation.

During 2012-2013,

  • Total Revenue –  Rs 2923 crore
  • Net profit was Rs 700 crore
  • Sanctioned projects worth Rs. 23,000 crore and
  • Disbursed Rs. 6,000 crore

The funds would be utilised to finance the government’s housing and urban infrastructure projects

Other Important Points

  • Investors can choose to apply in demat as well as physical form. Demat account is not mandatory. However, if you want to sell/trade these bonds before maturity, it is mandatory to have a demat account. You can subscribe to them in physical form as well and keep them till maturity.
  • Interest will get credited to your linked bank account through ECS.  The interest payment date is not yet fixed but the first due interest will be paid after 1 year from the deemed date of allotment.
  • The allotment will be made on a “first-come-first-served” basis. Allotment will be done within 12 working days from the closing date of the issue.
  • Bonds will be listed on NSE & BSE
  • NRI Investment: Non-US NRIs can also invest in this issue. They can apply for these bonds both on repatriation basis as well as non-repatriation basis.

 Download the Form

You can download the Form from HUDCO Website.

Taxation Aspects of Tax FREE Bonds

Read my Post –  Taxation Aspects of Tax free Bonds?

Merits & Demerits of Tax free Bonds

Read –  Tax free Bonds – Should you invest in these?

Allotment Status of HUDCO Tax free Bonds

Youc an check the Allotment status of your HUDCO Tax free Bonds application at link below by entering application number / PAN number:

https://mis.karvycomputershare.com/ipo/

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