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Hyderabad Municipal Corp raises Rs 1.95 bn for road projects through bonds

Funds raised through the bonds will be utilized to meet funding requirement of Strategic Road Development Plan

Abhijit Lele  |  Mumbai 

road, road construction, highway
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Greater (GHMC) has raised Rs 1.95 billion through for financing in city.

These 10-year bonds were placed with investors, including finance companies, banks and pension funds, at a coupon rate of 9.38 per cent. They carry “AA” rating from CARE and India Ratings.

(SBI Caps), arranger for transaction, said in a statement GHMC received bids of Rs 2.5 billion, which was 2.5 times the base issue size of Rs 1 billion. This is the second municipal bond issuance for GHMC. It had raised Rs 2 billion earlier this year.

Funds raised through the bonds will be utilized to meet funding requirement of (SRDP). The outlay of in the city is Rs 35 billion. Out of that, Rs 10 billion would be raised through bonds, Rs 15 billion from banks and a balance Rs 10 billion will come from internal accrual. Out of Rs 10 billion, GHMC has already raised Rs 3.95 billion through and will raise the balance through bonds in the remaining part of the current financial year, market sources said.

The unsecured bond issue is backed by a structure payment mechanism. Under it, property tax and fees and user charges collected by and due to GHMC will be deposited every month in a separate no-lien escrow account for debt servicing of bonds, SBI Caps said.

First Published: Mon, August 13 2018. 19:14 IST
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