Asit C. Mehta Investment Interrmediates Ltd.

Housing and Urban Development Corporation Ltd - PUBLIC ISSUE OF TAX FREE BONDS

TERMSHEET – TAX FREE BONDS OF Housing and Urban Development Corporation Ltd

Issuer	Housing and Urban Development Corporation Limited
Issue Opening Date	27th January 2012
Issue Closing Date	6th February 2012
Instrument	Tax-Free Secured Redeemable Non-Convertible Bonds in the nature of Debentures
Min Application Size	Rs 10,000/-
Thereafter in multiples of	Rs 1,000/-
Interest on Refund	4% p.a
Interest on application money	8% p.a.
Credit Rating	Fitch AA+ (ind) by Fitch Limited "CARE AA+ by CARE
Issue size	Rs. 2,000 Crore with an Green Shoe option (option to retain oversubscription) of up to Rs. 4,684.72 Crore
Security	The Bonds proposed to be issued are secured by a floating first pari-passu charge on present and future receivables of our Company to the extent of amount mobilized under the Issue. The Company reserves the right to create first pari-passu charge on present and future receivables for its present and future financial requirements.
Tranche	Series-I	Series-II
Tenor	10 Years	15 Years
Put Call Option	None	None
Maturity/ Redemption	At par on the expiry of 10th Year from the Deemed Date of Allotment	At par on the expiry of 15th Year from the Deemed Date of Allotment
Annual Coupon
Retail Investors (Category III)	8.22%	8.35%
Other Investors (Category I & II)	8.10%	8.20%
Note:	The differential rate for retail investor shall be applicable only to the first allottee. In the event of Sale/Transfer by the original allottee of a retail bond, the subsequent allottee will get the rates of the other investors category.
Interest payment	Annual	Annual
Interest Payment Date	The date, which is the day falling one year from the Deemed Date of Allotment in case of first interest payment and the same date, till the date of redemption for subsequent interest payments.
Listing	Proposed on BSE Ltd. ("BSE") and National Stock Exchange of India Ltd.
	("NSE"). The Designated Stock Exchange for the Issue is NSE
Trustee	SBI Capital Trustee Company Limited

NOTE: The differential rate for Retail Investors shall be applicable only to the 1st allottee. In the event of Sale/Transfer by the original allottee of a retail bond the subsequent allotee will get the rates of the other Investor's category.

Housing and Urban Development Corporation Limited (HUDCO) was established in 1970 as a wholly owned Government company with the objective to provide long term finance and undertake housing and urban infrastructure development programmes. HUDCO's sustained performance and profitability earned them Mini- Ratna status conferred in FY 05. HUDCO had sanctioned loans of Rs. 37,464 cr for housing and Rs. 84,906 cr for urban infrastructure on a cumulative basis up to Dec 2011.

The business is broadly classified into the following two business platforms:

Housing finance: HUDCO finances dwelling units in the urban and the rural areas. HUDCO has sanctioned Housing Finance of Rs 36,110 cr (30.65% of total financing activities as on March 31, 2011).

Urban infrastructure finance: HUDCO finances projects relating to social infrastructure and area development, water supply, sewerage and drainage, roads and transport, power, emerging sector, commercial infrastructure and others. HUDCO has sanctioned Urban Infrastructure Finance to the tune of Rs 81,691 cr (69.33% of total financing activities as on March 31, 2011). In addition, HUDCO also provide consultancy services in the field of urban and regional planning, design and development, environmental engineering, social development, government programmes and others.

Strong financial position: HUDCO has been operating its financing business profitably since inception.
Rich Parentage: Their business is funded through equity from the GoI & market borrowings. Relationship with the GoI provides them access to lower cost funding & enable them to source foreign currency loans.
Pan-India presence:- HUDCO has extended finance for housing and urban infrastructure projects to customers in 33 states and union territories covering around 1,800 cities and towns.
Established track record:- HUDCO has 41-years of experience in the housing financing market. As on Dec 31, 2011, the Company had provided finance for over 15 mn dwelling units and over 1,600 urban infrastructure projects in India.
Wide spectrum of consultancy services:- As part of consultancy services, up to Dec 31 2011, they had appraised 1,236 projects with a project cost of Rs 27,515.34 cr under JNNURM.
'CARE AAA (SO)' rating for HUDCO's unsecured bonds: - CARE has assigned a rating of 'CARE AAA (SO)' to the unsecured bonds issued by HUDCO aggregating to Rs 1,036.4 cr as on Oct 10, 2011. The rating of 'CARE AAA (SO)' was primarily based on credit enhancement in the form of 'Letter of Comfort' from the then Ministry of Urban Employment and Poverty Alleviation.
Loans backed by Govt. guarantees: Most of HUDCO's loans to various state entities are secured by guarantees from the relevant state governments to repay outstanding debt facilities or mortgage of properties with a minimum security cover of 125% of the total loan amount. Further, loans to entities in the private sector are secured by mortgages of the respective project properties providing a minimum security cover of 150% of the total loan amount, personal guarantees and contributions by promoters, as deemed fit by HUDCO.