The Pune Municipal Corporation (PMC) has raised Rs 200 crore by selling municipal bonds. PMC is the first urban local body to do so after new norms were laid down by the Securities and Exchange Board of India (SEBI) two years ago. The last time municipal bonds were sold was 14 years ago by the Ahmedabad Municipal Corporation (AMC) in 1998.
The bonds were priced at a coupon of 7.59 per cent, to be paid twice in a year. PMC Commissioner Kunal Kumar said that the issue was subscribed six times and a number of investors that included banks, insurance companies and pension funds participated.
As part of a Rs 2,260 crore borrowing plan spread over the next five years, the next issue could be made in December or March next year.
We were confident on our back-end system. We have improved our financials, we have taken active steps on improving our governance structure and overall we had a very sound project to bring to the market.PMC Commissioner Kunal Kumar
The funds raised by the bond sale will be used for a Rs 3,500 crore water metering project which also has financial backing from the centre’s Atal Mission for Rejuvenation and Urban Transformation (AMRUT) as well as the Smart Cities Mission.
SBI Capital Markets president and chief operating officer Ashwani Bhatia, who was involved in the deal said that the New Delhi Municipal Corporation (NDMC) could be the next urban local body to offer municipal bonds.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.