This is one of the only instruments whose interest is exempt from tax, apart from PPF, which is one reason you would know how to buy it, once the offer is over. Now, to ensure you do not miss the bus after the Initial Public Offering is over, you can buy the bonds from the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE).
You can buy it in the same manner as you buy shares from the stock exchange. What is important, however, is to check things like interest payment data, interest rate, yields, maturity date etc.
For that you need to first visit nseindia.com. After that type the name of the scrip for example, if it is HUDCO Tax Free bonds, just type HUDCO. You can see the price as well as a small box saying "securities information". Click on securities information and you will get information regarding the series, issue date, face value, next interest payment date, coupon rate, maturity date, credit rating and sometimes even the yield to maturity. This is fantastic information in one go.
If the price of the bond is below the face value than your yield would be higher than the coupon rate. One important point to member in buying tax free bonds from the stock exchanges, is that you should buy at an attractive price for your yields to go up.
Another important point to note is that tax free bonds do not have high liquidity. So, if you are planning to say buy in bulk, please remember that quantity may not be available for sale. Also, when you want to sell large quantities, there maybe no buyers.