PUBLIC ISSUE OF TAX FREE SECURED REDEEMABLE NON CONVERTIBLE DEBENTURES of face value of Rs. 10,000 each having tax benefits under section 10(15) (iv) (h) of the Income Tax Act, 1961, as amended for an amount aggregating upto Rs. 3,750 Crore (the Issue)
NATIONAL HOUSING BANK (Constituted in 1988 under the Act of Parliament- National Housing Bank Act, 1987 and is wholly owned by the Reserve Bank of India)
ABOUT THE ISSUER
Company Established under the Act of Parliament viz, NHB Act in 1988 to operate as a principal Highlights agency to promote housing finance institutions both at local and regional levels and to provide financial and other support to such institutions Wholly owned by the Reserve Bank of India Our functions o Regulatory and Supervision of HFCs o Financial assistance to PLIs by way of refinance for development and expansion of housing finance market in India o Promote and develop HFC‘s to improve/ strengthen the credit delivery network for housing finance in the country Strengths Strong GoI support and relationships with government entities Pioneering initiatives in the housing sector in India Financial strength: business is funded through equity from the Reserve Bank of India and market borrowings of various maturities, including bonds and term loans CRISIL and CARE have assigned us the highest credit ratings of "CRISIL AAA/Stable" and "CARE AAA" with stable outlook respectively, for our long-term domestic borrowings Strong asset quality and robust credit and risk management policies Established relationships with housing sector participants Well-developed relationships with banks and financial institutions Experienced and committed management and employee base with in-depth sector expertise Strategies Continue to play a strategic role in GoI initiatives for HFC’s Strengthen relationships with banks and financial institutions Reduce the housing shortage in the country through various initiatives particularly for rural housing and low moderate income Households
Financial Total Long Term Loans and Advances increased from Rs. 17,528 crores as of March Performanc 31, 2008 to Rs. 28,490 crores as of March 31, 2012 e Total income increased from Rs. 1,581.51 crores as of March 31, 2008 to Rs. 2,499.22 crores as of March 31, 2012 Net Profit as per Profit & Loss Account increased from Rs. 169.70 crores as of March 31, 2008 to Rs. 387.10 crores as of March 31, 2012
TAX BENEFITS OF THE BONDS The income by way of interest on these Bonds is fully exempt from Income Tax and shall not form part of Total Income No deduction of tax at source (TDS) from the interest, which accrues to the bondholders in these bonds irrespective of the amount of the interest or the status of the investors No upper limit on investment amount No lock in period for the Bonds The Bonds shall be listed and can be traded on both BSE and NSE Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth-tax Act, 1957 However, no deduction from the total income will be available for invested amount
Issue Opening Date – March 11, 2013 Issue Closing Date – March 15, 2013
General Terms of the Issue
Issuer National Housing Bank ICICI Securities Ltd., Enam Securities Private Ltd., Kotak Mahindra Capital Company Lead Managers Ltd. and SBI Capital Markets Ltd., Public issue of the tax free bonds in the nature of secured redeemable non- convertible debentures of NHB of face value of Rs.10,000/- each, having benefits under section 10(15)(iv)(h) of the Income Tax Act, proposed to be issued by NHB pursuant to the Prospectus, for an amount up to Rs. 3,750 Crore*
Issue Size *In terms of the Notification, NHB is allowed to raise funds through private placement route in one or more tranches not exceeding Rs. 1250 Crore i.e. up to 25 percent of the allocated limit for raising funds through Tax Free Bonds during Fiscal 2012-13 ending on March 31, 2013, in terms of the Notification. NHB shall ensure that the Bonds issued through public issue and private placement route shall together not exceed Rs. 5,000 Crore. Tax Free, Secured, Redeemable, Non-Convertible Debentures having tax benefits Instrument u/s 10 (15) (iv) (h) of Income Tax Act, 1961 Issuance Form Both in demateriaized form as well as in physical form, at the option of Applicants
Credit Rating ‘CRISIL AAA /Stable’ by CRISIL and ‘CARE AAA’ by CARE
Pari passu floating first charge on the specific book debts of NHB, as may be mentioned in the security documents and/or Bond Trust Deed and as may be Security further notified by NHB to the Trustee, from time to time, with an asset cover of one time of the total outstanding amount of Bonds. Listing Proposed to be listed on NSE Trustee IL&FS Trust Company Limited Depositories NSDL and CDSL Registrar to the Karvy Computershare Private Limited Issue Issue Opening March 11, 2013 Issue Closing March 15, 2013 On Allotment: Same as coupon rate for respective categories Interest on On Refunds: 5.00% per annum Application Interest Period: From the date of realization of the cheque(s)/demand draft(s) or Moneys three Days from the date of upload of each Application on the electronic
Application platform of the Stock Exchange whichever is later upto one day prior to the Deemed Date of Allotment. Please note that interest on application money will not be paid to ASBA applicants Please note that interest will not be paid on monies liable to be refunded in case of invalid applications, applications liable to be rejected, applications which are withdrawn by the applicant
Specific Details on Bonds
Face Value per Bond Rs. 10,000 Issue Price per Bond At par i.e. Rs. 10,000 Minimum Application Size 1 Bonds (Rs. 10,000)
In multiples of One Bond (Rs. 10,000) Market Lot/ Trading Lot One Bond Amount payable on Full amount on application application Issuance In dematerialised form and physical form, at the option of the Applicant* Trading Compulsorily in dematerialized form* Tenure 10 Years Redemption At par at the end of 10th Year from the Deemed Date of Allotment
Redemption Amount per Repayment of the Face Value of Bonds plus any interest that may have Bond accrued at the Redemption Date Retail Investors ** QIBs, HNIs and Corporates Coupon Rate 7.32% 6.82% Interest Payment Frequency Annual Retail Investors ** QIBs, HNIs and Corporates Annualised Yield 7.32% 6.82% The Deemed Date of Allotment will be the date on which the Board of Directors or Chairman and Managing Director is deemed to have approved the Allotment of Bonds or any such date as may be determined by the Deemed Date of Allotment Board of Directors or Chairman and Managing Director. All benefits under the Bonds including payment of coupon rate will accrue to the Bondholders from the Deemed Date of Allotment. Actual Allotment may occur on a date other than the Deemed Date of Allotment.
*In terms of Regulation 4(2)(d) of the SEBI Debt Regulations, NHB will make public issue of the Bonds in the dematerialised form. However, in terms of Section 8 (1) of the Depositories Act, NHB, at the request of the Investors who wish to hold the Bonds in physical form will fulfil such request. However, trading in Bonds shall be compulsorily in dematerialized form.
**In case the Bonds held by the original Allottees under Category IV Portion are sold/ transferred (except in case of transfer of Bonds to legal heirs in the event of death of the original Allottees), the coupon rate shall stand revised to the coupon rate applicable for the Allottees falling under Category I, II & III Portions
Eligible Investor Categories and Allocation
Category Who can apply Allocation • Public Financial Institutions, scheduled commercial banks, multilateral and bilateral development financial institutions, state industrial development corporations • Provident funds and pension funds with minimum corpus of Rs. 2,500 lakhs Category I • Insurance companies registered with the IRDA Up to 25% (Qualified • National Investment Fund of the Institutional • Insurance funds set up and managed by army, navy or air force of Overall Buyers) the Union of India or set up and managed by the Department of Issue Size * Posts, India • Mutual Funds registered with SEBI • Alternative Investment Funds, subject to investment conditions applicable to them under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 Category II Companies within the meaning of Section 3 of the Companies Act, Up to 20% (Non limited liability partnership(s) registered under the Limited Liability of the Institutional Partnership Act, 2008 and other bodies corporate registered under the Overall Investors) applicable laws in India and authorized to invest in the Bonds Issue Size * Category III Following Investors applying for an amount aggregating to above Rs. Up to 15% (High 10 lakhs across all Series of Bonds in the Issue: of the Networth i. Resident Indian individuals; Overall Individuals) ii. Hindu Undivided Families through the Karta and Issue Size * Category-IV Following Investors applying for an amount aggregating to up to and Up to 40% (Retail including Rs. 10 lakhs across all Series of Bonds in the Issue: of the Individual i. Resident Indian individuals; Overall Investors) ii. Hindu Undivided Families through the Karta and Issue Size *
* Note: Allotment shall be made on a first come first serve basis across all categories, on a date priority, to be determined on the basis of the date of uploading of each application into the electronic system of the Stock Exchange. If there is any under subscription in any Portion, priority in Allotments will be given in the following order: (i) Retail Individual Investor Portion (ii) QIB Portion (iii) Domestic Corporate Portion (iv) High Networth Individual Portion
(For further details, please refer to Prospectus dated March 6, 2013)