HUDCO Tax Free NCD Issue started

Public Issue of Tax Free Secured Non-Convertible Debentures by HUDCO Ltd

Brief Introduction of the company:

 Housing and Urban Development Corporation Limited (HUDCO) was established in 1970 as a wholly owned Government company with the objective to provide long term finance and undertake housing and urban infrastructure development programmes. HUDCO’s sustained performance and profitability earned them Mini-ratna status conferred in FY 05. HUDCO had sanctioned loans of Rs. 37,464 cr for housing and Rs.84,906 cr for urban infrastructure on a cumulative basis up to Dec 2011.

Issue details:

Issuer	Housing & Urban Development Corporation Limited
Offering	Tax Free Secured Redeemable Non Convertible Debentures    Issue Size Rs. 2,000 crores with an option to retain oversubscription up to Rs.4684.72 crores
Issue Open Date	27th January, 2012
Issue Closing Date	6th February, 2012
Face Value	Rs.1,000 per Bond
Minimum Application	Rs. 10000 (10 Bonds) & in multiples of 1000 (1 Bond)
Tenor/Redemption Date	10 Years and 15 Years
Ratings	, “CARE AA+” by CARE & “FITCH AA+(ind)” by FITCH
Issuance	In dematerialized form as well as physical form, at the option of Applicants.
Lead Managers	ENAM Securities Pvt Ltd SBI Capital Markets Ltd.
Depository	National Securities Depository Ltd. and Central Depository Services (India) Ltd
Trustee	SBI CAP Trustee Company Ltd
Allocation	Category I (QIB+ Corporate)- up to 45%; Category II (Individual above 5 Lakhs)- up to 25%; Category III (Individual below 5 Lakhs)- up to 30%
Listing	Proposed to be listed on BSE & NSE

Highlights of Tax Benefits

·         The income by way of interest on these Bonds is fully exempt from Income Tax and shall not form part of Total Income as per provisions under section 10 (15) (iv) (h) of IT Act.

·         There will be no deduction of tax at source from the interest, which accrues to the bondholders on these bonds irrespective of the amount of the interest or the status of the investors.

·         Wealth Tax is not levied on investment in Bonds under section 2(ea) of the Wealth-tax Act, 1957.

The issue

Options	I	II
Tenor	10 Years	15 Years
Face Value(Rs./Bond)	1,000.00	1,000.00
Minimum Application Size	10000 or 10 Bonds	10000 or 10 Bonds
In Multiples of	1000 or 1 Bond	1000 or 1 Bond
Coupon Rate (%)p.a.
Retail (Category III)	8.22%*	8.35%*
Others (Category I & II)	8.10%	8.20%
Interest Payment	Annually	Annually
Interest Payment Date	October 15, every year	October 15, every year
Redemption Date	10 Years from the Deemed Date of Allotment	15 Years from the Deemed Date of Allotment
Maturity Amount	Face Value + Interest Accrued at the Redemption Date	Face Value + Interest Accrued at the Redemption Date

*The coupon rates of 8.22% p.a. and 8.35% p.a. shall be payable only to the original allottees under Category and shall not be payable to the transferees in case the Bonds are transferred or sold by the original allottee. In such case, the transferees shall be entitled to receive coupon rates of 8.10% p.a. and 8.20% p.a. for the Tranche 1 and Series I Bonds and Tranche 1 and Series II Bonds respectively.

Who Can Apply?

Category I:          QIB and Corporates

Category II:         Resident Indian individuals; Hindu Undivided Families through the Karta

Non Resident Indians on repatriation as well as non-repatriation basis (Above Rs.5 Lakhs)

Category III:       Resident Indian individuals; Hindu Undivided Families through the Karta

Non Resident Indians on repatriation as well as non-repatriation basis (Up to Rs.5 Lakhs)