India allows 7 entities to raise Rs 400 billion via tax-free bonds

Mumbai: India has permitted seven companies to issue tax-free bonds worth 400 billion rupees ($6.29 billion) in the current financial year that started in April, according to a government circular seen by Reuters.

The ceiling coupon rate for AAA-rated issuer of tax-free bonds has been fixed at 55 basis points below the government bond yield for retail investors and 80 basis points for other investors, the circular showed.

National Highways Authority of India, Indian Railways Finance Corporation, Housing and Urban Development Corporation, Indian Renewable Energy Development Agency, Power Finance Corporation, Rural Electrification Corporation and NTPC can issue the tax-free bonds, according to the circular.