HUDCO Tax free bonds for 2012-2013-Is this a best investment option?

HUDCO Tax free bonds for 2012-2013 - Are these best investments

HUDCO Tax free bonds for 2012-2013-Is this a best investment option ?

Housing Urban Development Corporation Limited is proposing to issue tax free bonds which are in the nature of secured, redeemable, non convertible debentures for the year 2012-13. The proposed issue is for Rs 750 crores with an option to retain oversubscription upto Rs 5,000 Crores.


HUDCO is a public sector enterprise which provides long term finance for the housing development projects.

Details about HUDCO tax free bonds issue

  • Date of open: 9-Jan-2013
  • Date of closure: 22-Jan-2013
  • Face value : Rs 1,000 per bond
  • Min subscription: 5 bonds i.e. Rs 5,000 and multiples of 1 bond thereon
  • There are 2 series of tax free bonds. Series-1 for 10 years; Series-2 for 15 years
  • Interest rates are as follows:

            Tenure            Interest-Individuals      Interest for Banks/HNI’s

10 years           7.84                              7.34

15 years           8.01                              7.51

  • Crisil and India Ratings and Research Pvt. Ltd have rated this issue as AA+ which states as high safety regarding timely serving of the financial obligations.
  • No TDS would be deducted on the interest which is paid annually
  • You can purchase them only in Demat form
  • It would be listed in NSE


  • Currently IIFCL tax free bonds issue is also in progress. However comparing to IIFCL tax free bonds, HUDCO Tax free bonds would rate on the higher side due to higher interest rates.
  • Investment in HUDCO tax free bonds would also one of the best investment options for a tax payer who is in the highest tax bracket, as it would be free fixed income for long term.
  • Under the economy where interest rates are falling, investing in such tax free bonds provide good fixed income over long term for every investor.  

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