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Encouraged by the success of its private placement programme, the National Housing Bank (NHB) is looking to come out with a retail offering of similar tax-free bonds in the third week of September.
“We are in the process of completing the formalities. Our effort will be to come with the retail issue in the third week of September,” R.V.Verma, Chairman and Managing Director of NHB, told Business Line here on Friday.
NHB on Thursday closed its private placement programme that generated a demand worth Rs 1,050 crore. This was against issue size of Rs 900 crore (including a green shoe option of Rs 800 crore).
The tax-free bonds were issued for tenures of 10, 15 and 20 years. The coupons offered for the bonds were 8.01 per cent, 8.46 per cent and 8.37 per cent, respectively.
The demand for tax-free bonds under the private placement programme came mainly from domestic investors.
“Our private placement has been a success in the current market conditions. There has been a good appetite from institutional investors,” Verma said.
NHB had not tapped sovereign wealth funds for this issue, although such investors were allowed to participate, he said.
The Central Board of Direct Taxes had earlier this month permitted NHB to issue tax-free bonds for Rs 3,000 crore for 2013-14. Of this, 30 per cent was allowed to be issued under private placement.
Verma said the remaining Rs 2,100 crore would be raised in two to three tranches with the first likely in the third week of September.
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