Andhra to raise Rs 10 bn through securities for Amaravati's development

The Andhra Pradesh government plans to raise Rs 10 billion through sale of its securities and the amount will be used for the development of its new capital Amaravati, according to a gazette notification.

The securities will be sold on October 23 through an auction by the Reserve Bank of India. Bids will have to be submitted to the RBI core banking solution system by Tuesday.

"The proceeds of loan will be used for financing, particularly of the capital and developmental nature included in the annual plan of the Andhra Pradesh for 2018-19," the notification said.

The state government said up to 10 per cent of the notified amount of the sale will be allotted to eligible individuals and institutions subject to a maximum limit of 1 per cent to the notified amount of a single bid.

The government securities will be sold at a coupon rate to be determined by the RBI at the yield based auction under multiple price format.

The results will be declared on the same day and the successful bidders will have to make payment on October 24.

The state government is constructing a greenfield capital on banks of the Krishna. The state has already raised Rs 113 billion and out of which Rs 34 billion has been spent.

The central government has given Rs 15 billion, while neighbouring Telangana Rs 10 billion for the development of the new capital.

The state government is looking at Rs 500 billion investment in creating only basic infrastructure.