Tax free bonds from IRFC oversubscribed 2.38 times

MUMBAI: Tax free bonds from IRFC were oversubscribed 2.38 times on the first day, with the retail portion being subscribed 1.3x times. IRFC mopped up Rs 10,796 crore against the issue size of Rs 4532 crore, with all segments namely QIB, HNI, corporate and retail seeing oversubscription. “Fixed income investors rushed to IRFC due to the big size, higher chances of allotment and wanting to lock into high rates at the earliest,” says Ajay Manglunia., Head (Fixed Income), Edelweiss Capital. The retail segment saw bids worth Rs 2353 crore, against the size of Rs 1813 crore. Retail investors who make an application upto Rs 10 lakhs are likely to get 75 per cent allotment for the amount they applied for.

IRFCs issue is the fourth issue of tax free bonds in this financial year. The earlier issues of NTPC, REC and PFC were for Rs 700 crores each and were oversubscribed 10-12 times on the first day itself, leading to poor allotment of 12-16 per cent only.

IRFCs issue is the fourth issue of tax free bonds in this financial year. As per a CBDT circular, seven CPSEs can raise Rs 40,000 crore through issuances of tax free bonds in this financial year. Merchant bankers expect an issue of Rs 12,000 crore from NHAI later this month, followed by that of HUDCO of Rs 5000 crore.