Krishna Valley To Float Rs 250-Crore Bond Issue In Nov

Maharashtra chief minister Manohar Joshi on Monday said the public issue will be launched at a one lakh-strong farmers' rally in Alpatti, Sangli, on Vijayadashami day. The private placement bond issue was a resounding success with oversubscription yielding Rs 427.63 crore to the corporation against the targeted Rs 150 crore. The private placement was for a 11-year paper at 17.50 per cent with a five-year put option.

The corporation has been set up by the Maharashtra government for development in Krishna valley to utilise the state's share of 594 thousand million cubic feet of the Krishna waters by 2000.

If the state fails to utilise the water awarded by the Krishna water tribunal in 1976, the unutilised portion will stand forfeited to Karnataka and AP.

 

The project, which will cover 22.57 lakh hectares of land, needs a total investment of around Rs 7,100 crore. While the corporation plans to raise 50 per cent of the amount from the market, the rest will be provided by the Maharashtra government through budgetary allocation.

Dhananjay Mungale of DSP Financial Consultants, the lead manager to the issue, said an application will be sent to the Securities and Exchange Board of India (Sebi) by the weekend after the loose ends are tied. He said that the bond instruments that are being contemplated are a nine-year paper and another five-to-seven paper. Early redemption option is still being worked out, he said.

The issue is aimed at a different class of investors, unlike the target audience of recent offerings from Tisco and Larsen & Toubro. Farmers from the Krishna basin region in Maharashtra are expected to largely contribute to a scheme that will benefit them the most. The investors will have to invest a minimum of Rs 5,000