State-owned Housing and Urban Development Corporation (HUDCO) today said it has raised Rs 2,216 crore through public issue of tax-free bonds and the funds will be used for lending to low-cost housing and urban infrastructure projects.

The issue, which was launched on January 9, closed on February 7. The size of issue size was Rs 750 crore, with an option to retain over-subscription up to Rs 5,000 crore.

"We have done well. The issue was oversubscribed by about three times. The maximum amount was raised from the retail investors," HUDCO Chairman and Managing Director V P Baligar told PTI.

The company has raised Rs 1,402 crore from the retail investors, of which Rs 801 crore came from retail investors investing up to Rs 10 lakh and the rest Rs 601 crore from the high-net worth individuals (HNIs), he added.

"We have raised more funds from retail investors than other tax-free bonds public issues launched recently," Baligar said.

Out of the total 20,881 investors that participated in this issue, he said 20,481 were retail investors and 241 HNIs.

For retail investors, HUDCO offered a higher coupon rate of 8.01 per cent per annum for 15 years maturity period and 7.84 per cent for 10 years. An investment up to Rs 10 lakh qualifies under retail category.

Asked about further fund raising plan, Baligar said: "We have been allowed to raise up to Rs 5,000 crore by the finance ministry. We have already garnered Rs 2,216 crore and we are considering to raise the balance before this fiscal".

HUDCO, a mini-ratna firm, is a financial institution that provides long-term finance for housing and urban infrastructure projects. The company posted a net profit of Rs 630.33 crore over a gross income of Rs 2,778.63 crore in 2011-12 fiscal.

Baligar said the company would achieve the sanctioning and disbursal targets for this fiscal at Rs 22,000 crore and over Rs 6,000 crore, respectively.