NHAI set for Rs 10,000-cr tax-free bond issue

Investors to get 7.39-7.6% interest

National Highways Authority of India (NHAI)  will raise up to Rs 1,000 crore with an option to retain over subscription of up to additional Rs 9,000 crore aggregating up to a total of  Rs 10,000 crore, through public issue of tax free, secured, redeemable non-convertible bonds

The funds raised through this issue will be utilised for the part financing of various ongoing projects under the NHDP and also various special projects and future projects to be awarded under different modes. The interest income on bonds is exempted from levy of income tax in the hands of the investors.

The coupon rate for Category I, Category II and Category III investors i.e. Qualified Institutional Buyers, Corporates and High Net worth Individuals will be 7.14% and 7.35% for tenures of 10 years and 15 years respectively in Series IA and series IIA. The coupon rate for Category IV investors i.e. Retail Individual Investors will be 7.39% in Series IB and 7.60% in Series IIB for tenures of 10 years and 15 years respectively (i.e. Retail Individual Investors are being offered 0.25% more than other category of investors for bonds of corresponding tenure).

The issue opens on December 17, 2015 and is scheduled to close on December 31, 2015.

The bonds are proposed to be listed on the BSE Limited and NSE.

The Bonds proposed to be issued have been rated ‘IND AAA’ by IRRPL, 'CARE AAA’ by CARE, "[ICRA] AAA” by ICRA and ‘CRISIL AAA/Stable’ by CRISIL.

SBI Capital Markets Ltd, A.K. Capital Services Ltd, Edelweiss Financial Services Ltd, ICICI Securities Ltd and Axis Capital Ltd are the Lead Managers to the issue. Karvy Computer Share Private Limited is the Registrar to the Issue while SBICAP Trustee Company Limited is the Bond Trustee to the Issue.