Through tax-free bond issue, the Housing and Urban Development Corporation's (Hudco) is to raise around Rs 4,800 crore and the issue will open for subscription on September 17. The core issue size will be Rs 750 crore, while the rest would be green shoe. A green shoe is an option of allocating shares in excess of the shares included in the public issue and operating a post-listing price stabilising mechanism for a period not exceeding 30 days.
Hudco will offer coupon rate of 8.4 per cent, 8.51 per cent and 8.49 per cent for bonds with tenure of 10-year, 15-year and 20-year respectively. Retail applicants will get 25 basis points higher coupon in all three tenures.
The State-run lender's public issue of tax-free bonds is this financial year's second such offering after Rural Electrification Corporation (REC). The coupon offered by Hudco is slightly higher than REC. Hudco has a credit rating of AA+, one notch lower than REC's AAA.