Andhra mulls Rs 5000cr NRI bonds

New York State Pension Fund may invest in Andhra Pradesh

The Andhra Pradesh government is actively considering a proposal to raise Rs 2,500-5,000 crore through low-cost bonds from the Non-Resident Indians (NRIs), for taking up developmental programmes and meeting other fund requirements.

Disclosing this here on Wednesday, C C Reddy, advisor to the state government on foreign investments and placement of human resources abroad, said that the proposal was in a finalisation stage. "As and when the Reserve Bank of India and the state government approve of the plan to raise NRI bonds and the Government of India notifies the same, we will proceed," he said.

The $150-billion New York State Pension Fund has also expressed its interest in investing in Andhra Pradesh through its $300-million infrastructure fund, CC Reddy said.

He also announced that a non-profit organisation 'BUILD AP (USA) Foundation' has been formed in the US with 100 top NRI leaders to support the developmental activities in the state and help raise the bonds. Though the government is not yet decided on the interest rates for the bonds, he said it could be around 4 to 4.5 per cent.

"During my recent trip to the US, we consulted top ranking NRIs on the prospects of raising bonds from NRIs and the modalities are at present being worked out by the state government and merchant bankers like Kotak Mahindra," he said.

"Now NRIs, banks and other financial institutions are flush with funds. It is for the government to avail of quality borrowings. The borrowings could be utilised for irrigation projects, swapping of high-cost debts among other requirements," Reddy explained.

"My job is to secure loans at lesser interest rates and also bring in investments to the state. Being an NRI myself and having a long exposure to affairs of corporate finance, I use all my expertise to serve the state in this regard," Reddy said.

According to him, the US health secretary agreed to visit Andhra Pradesh and was expected to announce some grants to the state for the health sector during his visit.