Nabard, which is in the process of launching its maiden tax-free bonds worth Rs 3,500 crore, is likely to set coupon rate for its 10 and 15-year issues at 7.29 percent and 7.64 percent respectively, for retail investors. For institutional investors, the National Bank of Agriculture and Rural Development (Nabard) is offering rates of 7.04 percent and 7.35 percent for 10 and 15-year issues, according to sources. The rural-focused development lender plans to raise Rs 5,000 crore this year, of which Rs 1,500 crore has already been mopped up through private placements to institutional investors.
The balance Rs 3,500 crore will be mobilised through a public issue which will open for subscription on March 9. Around Rs 2,100 crore will be offered to retail investors investing up to Rs 10 lakh and the balance Rs 1,400 crore will be mopped up from qualified institutional buyers, corporates and HNIs. The lead managers for the issue are SBI Capital Markets, ICICI Securities, Edelweiss Financial Services and AK Capital.
Nabard, which for the first time is raising funds through tax-free bonds, will be using the proceeds to finance irrigation projects. The interest paid on these bonds will on annual basis.