Dewan Housing Finance Corp Ltd (DHFL)'s maiden public bond issuance attracted subscription worth about Rs 19,000 crore against a total issuance size of Rs 4,000 crore on the first day itself.
The original issue plan was to raise Rs 1,000 crore, with an option to retain oversubscription of up to Rs 4,000 crore.
The issuance is happening through 10 categories, maturing in three, five and 10 years. In one such category, inflation-linked bonds for three years can be subscribed. This is the first time anyone is issuing Consumer Price Index (CPI)-linked bonds.
Sources said the interest was most in the 10-year segment.
In total issuance, the portion reserved for qualified institutional investors were subscribed 27.74 times, and the high net worth individual segment was subscribed 31.07 times. The retail portion, investing up to Rs 10 lakh, was subscribed 6.18 times, data from BSE showed.
According to the company, the reason for success could be the first come, first served condition, coupled with AAA rating of the paper.
The CPI-linked floating rate instrument has a tenor of three years and the coupon rate (separate for high net worth individuals other retail investors) is between 9.10 per cent (Reference CPI + 4.08 per cent); and 9.20 per cent (Reference CPI + 4.18 per cent). The reference rate for this purpose is 12 months average inflation for the period, calculated at 5.02 per cent.
However, even if inflation falls sharply, investor won't be harmed as the floor rate has been fixed at 8.90 per cent. Similarly, in case of a spike in inflation, the issuer won't be affected too as the cap has been fixed at 9.50 per cent.
