[ecis2016.org] The Greater Hyderabad Municipal Corporation has said that it has raised Rs 100 crores through municipal bonds and plans to raise another Rs 200 crores over the next two months

The Greater Hyderabad Municipal Corporation (GHMC), on August 20, 2019, raised Rs 100 crores through an issue of municipal bonds, through the BSE’s electronic bidding platform, as part its Rs 300-crore fund-raising plan. The municipal body is planning to raise another Rs 200 crores through the bonds in the next two months, an official press release said. The funds would be used for the strategic road development project, which would result in hassle-free travel, less travel time, less fuel consumption and better pollution management in the city.

You are reading: Greater Hyderabad Municipal Corporation raises Rs 100 crores via municipal bonds

“The third tranche of GHMC Municipal Bonds was opened for bidding on August 20, 2019 and has got an overwhelming response from the capital market investors,” the statement added. GHMC decided to retain only Rs 100 crores at a coupon rate of 10.23%. Net interest after GoI (government of India) incentive of Rs 13 crores, is at nearly 9%. With this issuance, GHMC has also become the largest municipal bond route utiliser in the country, it said. GHMC had previously raised Rs 395 crores, in two tranches of Rs 200 crores and Rs 195 crores, through the issuance of municipal bonds in February 2018 and August 2018.

Hyderabad second civic body in India, to tap markets and sells bonds worth Rs 200 crores

Read also : Bombay HC restrains Thane Tree Authority from felling trees

Hyderabad’s civic body has become only the second in the nation, to raise funds from municipal bonds, by selling 10-year bonds worth Rs 200 crores, which will be used for a road project in the city

February 15, 2018: The Greater Hyderabad Municipal Corporation, on February 14, 2018, raised Rs 200 crores by selling 10-year bonds, becoming only the second civic body to tap funds from this route this financial year, after its counterpart in Pune. Proceeds from the issue, which was oversubscribed two times at a coupon of 8.9 per cent, would be used to fund a strategic road project in Hyderabad that is estimated to cost Rs 3,518 crores.

The municipality is planning to raise Rs 1,000 crores from bond sales in tranches. It will be financing Rs 1,000 crores for the project and raising the remainder from loans. “Hyderabad is a city of 10 million, with a 1,000-km road network. We need to improve the traffic junctions and make traffic hassle-free, by reducing travelling time,” municipal commissioner B Janardhan Reddy said.

Read also : Is the Coronavirus outbreak a ‘force majeure’ as defined under RERA, for Indian real estate?

[ecis2016.org] Housing minister recommends municipal bonds, to improve financial condition of municipalities

The bond issuance has been rated ‘AA’ (stable) by credit rating agencies and was oversubscribed by two times. The issue was managed by SBI Caps, which was also the sole i-banker for the Rs 200-crore bond sale by the Pune Municipal Corporation (PMC) in June 2017. SBI Caps president and chief operating officer Ashwani Bhatia said, there is an overwhelming investor response for municipal bonds. “Four more cities with high credit ratings are in the pipeline, which are expected to hit the markets over the next few months. They are expected to raise Rs 1,000 crores from these issuances,” Bhatia said.

The PMC had, in June 2017, raised Rs 200 crores by selling 10-year bonds, becoming the first civic body to tap money through this route in 15 years. That issue was oversubscribed over six times or Rs 1,200 crores from 21 investors spanning across insurance companies, mutual funds, nationalised banks and long-only pension funds. Till date the total amount raised in municipal bonds is Rs 1,095 crores.

Source: https://ecis2016.org/.
Copyright belongs to: ecis2016.org

Source: https://ecis2016.org
Category: Lifestyle