 "DHFL brings India's first CPI bond")
Mortgage financier Dewan Housing Finance Corp Ltd (DHFL) on Friday said it would raise Rs 4,000 crore through a host of bond options, including consumer price index (CPI)-linked one.
This would be the India's first CPI bond for retail investors. The bond's structure protects investors as well as the issuer in case of extreme fluctuation in inflation numbers.
It is a floating-rate bond with a tenure of three years and the coupon rate (separate for high networth individuals and other retail investors) is between 9.10 per cent (CPI plus 4.08 per cent) and 9.20 per cent (CPI plus 4.18 per cent). The reference rate for this purpose is 12 months average inflation for the period, calculated at 5.02 per cent.
In all, DHFL would be issuing 10 types of bonds with different tenures and having different structures, including the CPI-linked bonds. The bonds can be had at three, five and 10-year tenure with monthly, annual and cumulative payment options.
The AAA-rated bonds will have annual yields of 9.20-9.30 per cent.
According to Kapil Wadhawan, chairman and managing director of DHFL, in the bond issuance, retail individual investors and high net worth individuals have a combined allocation ratio of 60% and retail individual investors will get the first priority in case of undersubscription in any investor categories.
The issue starts on August 3.
This would be the India's first CPI bond for retail investors. The bond's structure protects investors as well as the issuer in case of extreme fluctuation in inflation numbers.
It is a floating-rate bond with a tenure of three years and the coupon rate (separate for high networth individuals and other retail investors) is between 9.10 per cent (CPI plus 4.08 per cent) and 9.20 per cent (CPI plus 4.18 per cent). The reference rate for this purpose is 12 months average inflation for the period, calculated at 5.02 per cent.
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However, even if inflation falls sharply, the investor won't be harmed as the floor rate has been fixed at 8.90 per cent. Similarly, in case of spike in inflation, the issuer won't be affected as the cap has been fixed at 9.50 per cent.
In all, DHFL would be issuing 10 types of bonds with different tenures and having different structures, including the CPI-linked bonds. The bonds can be had at three, five and 10-year tenure with monthly, annual and cumulative payment options.
The AAA-rated bonds will have annual yields of 9.20-9.30 per cent.
According to Kapil Wadhawan, chairman and managing director of DHFL, in the bond issuance, retail individual investors and high net worth individuals have a combined allocation ratio of 60% and retail individual investors will get the first priority in case of undersubscription in any investor categories.
The issue starts on August 3.