National Housing Bank likely to float bonds worth ₹3,000 crore this week

National Housing Bank (NHB) is planning to raise a sum not exceeding ₹3,000 crore through bonds, the bidding for which will open later this week, according to a report.

The apex financial institution for the housing sector is going to raise ₹3,000 crore from floating bonds with a maturity period of 3 years, 2 months and 20 days, a Moneycontrol report said.

The bonds will be open for bidding on Friday, April 12, and those interested can bid for them through the electronic bidding platform provided by the National Stock Exchange (NSE), the report added.

The base issue size of the aforementioned bonds stand at ₹1,000 crore, in addition to a greenshoe option of ₹2,000 crore, as per the report.

Through the greenshoe option, underwriters can have an option to issue as well as sell more number shares than originally planned by the issuer, meaning an option of higher profits for underwriters.

The bonds’ pay-in date is reported to be next week on Tuesday, April 16, 2024. A pay-in date is the date when money and bonds are exchanged between the two parties, that is, issuers as well as investors.

The minimum application size of the bonds have been set at ₹1 lakh, following which it would be in multiples of ₹1 lakh, the report stated.

Earlier this year in January, Life Insurance Corporation of India (LIC) stated that its Board has given approval for the acquisition of no more than 10% in a company that is promoted by the National Housing Bank, for residential mortgage backed securities.

State-owned National Housing Bank is the apex regulatory body for the housing finance companies in India and it functions under the Ministry of Finance.