IRFC tax free bonds issue oversubscribed 2.38 times

Moneycontrol BureauTax free bonds of Indian Railway Finance Corporation (IRFC) got oversubscribed 2.38 times on the maiden day of the initial public offering. IRFC mopped up Rs 10796 crore as against the issue size of Rs 4532 crore. IRFC tax free bonds issue opened today and offered three investment options - 10, 15 and 20 years tax free bonds. These three bonds offered tax free interest at the rate of 7.32%, 7.53% and 7.5% respectively to retail investors. Retail investors can apply for bonds up to Rs 10 lakh per person. IRFC tax free bond issue is the fourth tax free bond issue in the current financial year. Rural Electrification Corporation, National Thermal Power Corporation and Power Finance Corporation have already raised Rs 700 crore each in this financial year. Expectations of fall in interest rates have made investors consider lapping up these tax-free bonds. Earlier issues of tax free bonds have listed at a premium of around 5%. However, given the size of IRFC issue, the listing premium may not be high. Central public sector enterprises are allowed to raise Rs 40000 crore in the current financial year by issuing tax free bonds. National Highway Authority of India and Housing and Urban Development Corporation are expected to tap the financial markets to raise Rs 12000 crore and Rs 5000 crore, respectively.