Housing and
Urban Development Corporation Limited (“COMPANY” or the “ISSUER”) is issuing Tax
Free Bonds with a Face Value of Rs
1000 each in the nature of Secured, Redeemable, Non-Convertible Debentures
having benefits under Section 10(15)(iv)(h) of the Income Tax Act, 1961, as
amended (“BONDS”) to aggregate
amount upto Rs 750 crore
with an option to retain an oversubscription of up to Rs 5,000 crore (“Shelf Limit”).
The
minimum subscription is five (5) Bonds across all of the Series of Bonds and in
multiples of one (1) Bond thereafter. The Issue will open on January 9, 2013
and will close on January 22, 2013.
- Public Issue of Tax Free bonds in the nature of Secured, Redeemable, Non Convertible
Debentures by the Company under Section 10(15)(iv)(h) of Income Tax
Act, 1961 – Tranche - I Bonds
- Bonds to aggregate upto
Rs 750 crore
- Coupon rate of 7.34% for Series 1 Bonds and 7.51% for Series 2 Bonds on per annum
basis
- Credit rating of ‘CARE AA+’ by CARE and ‘
- The Issue will open on January 9, 2013, and will
close on January 22, 2013
- The Bonds proposed to be listed
on The National Stock Exchange of India Limited
- Option to hold Tranche 1 Bonds
in either physical or demat form
- NRIs and FIIs are eligible to participate in the Issue
The
Bonds have been assigned Credit rating of ‘CARE
AA+’ by CARE and ‘IND AA+’ by India
Ratings and Research Private Limited (IRRPL), indicating high degree of safety
regarding timely servicing of financial obligations and carrying very low
credit risk.
The
Tranche 1 – Series 1 and Tranche 1 - Series 2 Bonds will be redeemed after ten
(10) years and fifteen (15) years respectively from the deemed date of
allotment. The Bonds will be issued in both physical and dematerialized form. The
Issue Price for both the Series is `
1,000 per bond.
There
are 4 categories of investors who can apply in the issue – Category I, Category
II, Category III and Category IV. Category I includes public financial
institutions, scheduled commercial banks, multilateral and bilateral
development financial institutions, State industrial development corporations,
FIIs and their sub-accounts registered with SEBI, Provident funds and pension
funds with minimum corpus of Rs 25
crore, Insurance companies, National Investment fund, Insurance funds set up
and managed by army, navy or air force of the Union of India or set up and
managed by the Department of Posts, Mutual Funds and Alternative Investment
Funds. Category II will include Companies, and bodies corporate authorized to
invest in Bonds. Category III will include Resident Indian individuals,
Eligible NRIs on a repatriation or non – repatriation basis and Hindu Undivided
Families applying for an amount aggregating to above Rs 10 lakh across all series in the
Issue. Category IV will include resident Indian individuals, Eligible NRIs on a
repatriation or non – repatriation basis and HUFs applying for an amount
aggregating upto and including Rs
10 lakh across all series of Bonds in this Issue.
In
the case of Series 1 of the Bonds, the coupon rate is 7.34% payable annually
and in the case of Series 2, the coupon rate is 7.51% payable annually from, and
including, the Deemed Date of Allotment up to, but excluding, their respective
Maturity Dates. The annualized yield for Category I, II, and III for Series 1
is 7.34% while that for Series II is 7.51%. Additional interest at the rate of
0.50% per annum shall be available to the original Allottees under Category IV
for the Tranche-I Series 1 Bonds and Tranche-I Series 2 Bonds respectively,
which will result in an annualized yield of 7.84% and 8.01% respectively per
annum. However, if the original Category IV allottees sell/transfer the bonds
held (except in case of transfer of Bonds to legal heir in the event of death
of the original Allottee), the coupon rate shall stand revised to the coupon
rate applicable for Allottees falling under Category I, Category II and
Category III.
The
Company intends to utilize the Issue Proceeds for lending purposes, working
capital requirements, augmenting the resource base of our Company and other
operational requirements (including debt servicing, statutory payments, establishment
and administrative purposes and other working capital requirements). Not more
than 10% of the Overall Issue Size will be allocated to Investors who are FIIs
(Category I) and Eligible NRIs (Categories III and IV). However, all
subscription monies received from FIIs, Eligible NRIs (and other non resident
Applicants across all Categories) through the Issue will be kept in a separate
account opened and maintained by the Company, the proceeds of which account
shall not be utilised for any lending purposes, and shall be utilized for the
following purposes:
(a)
Debt servicing, which includes servicing of both the principal amounts as well
as interest payments of various debt facilities availed by the Company in the
past and currently outstanding in its books of accounts, including loans,
market borrowings (which include our non-convertible bonds/ debentures);
(b)
Statutory payments;
(c)
Establishment and administrative expenses;
and
(d)
Other working capital requirements of the Company.
The
Lead Managers to the Issue are Enam Securities Private Limited (the
merchant banking business of Enam Securities Private Limited has vested with
Axis Capital Limited, which is in the process of completing the formalities of
its SEBI registration), ICICI Securities Limited, Kotak Mahindra Capital
Company Limited and SBI Capital Markets Limited. The Debenture Trustee for the
Bondholders is SBICap Trustee Company Limited.
Disclaimer:
Housing and Urban Development Corporation Limited ( “Company”), is
proposing, a public issue (“Issue”) of tax free bonds of face value of Rs. 1,000
each in the nature of secured, redeemable, nonconvertible debentures, having benefits
under section 10(15)(iv)(h) of the Income Tax Act, 1961, as amended (“Bonds”)
and has filed a Shelf Prospectus dated December 13, 2012 and a Prospectus
Tranche – I dated December 13, 2012 (the Shelf Prospectus and the Prospectus
Tranche - I referred to as “Prospectus”) with the Registrar of Companies,
National Capital Territory of Delhi & Haryana, the National Stock Exchange of
India Limited (“NSE”) which is the Designated Stock Exchange for the Issue and
the Securities and Exchange Board of India (“SEBI”). The issue size under the
Prospectus Tranche – I aggregates to Rs 750.00 crore with an option to retain
over subscription up to the Shelf Limit (i.e. Rs. 5,000.00 crore). The
Prospectus is available on the website of NSE at www.nseindia.com, SEBI at
www.sebi.gov.in, the Company at www.hudco.org and the websites of the Lead
Managers at www.enam.com, www.icicisecurities.com, www.investmentbank.kotak.com and www.sbicaps.com.
Investors are advised to take any decision to invest in the Bonds pursuant to
their examination of the Company and on the basis of disclosures made in the
Prospectus. Please see the section entitled “Risk Factors” beginning on page 9
of the Shelf Prospectus for risks in this regard.
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