Ghaziabad's Rs 150-Crore 'Green Bond’ Lists On The BSE Bond Platform
New Delhi, April 8 (TNA) The Ghaziabad Municipal Corporation which raised 150 Crore (Base Issue: 100 Crore with the green shoe option of 50 Crore) via Municipal Bonds on private placement basis using the BSE bond platform, was listed on the exchange on Thursday. It was opened for subscription on March 31, 2021.
The coupon rate of the taxable bond was fixed at 8.1% per annum and was rated AA by India Ratings and AA(CE) by Brickworks and has a maturity of 10 years with a staggered redemption. Additionally, the company received Rs 19.5 Crore incentive from Government of India for raising Municipal Bonds.
The Ghaziabad Municipal Corporation (GMC) has entered into an understanding with Sahibabad Industries Association for the purpose of achieving various goals and objectives relating to water supply. The Capital raised is proposed to partially fund the tertiary sewage and water treatment plant, which is estimated to cost approximately Rs 239.93 Crore.
Speaking on the occasion, Mahender Singh Tawar, Municipal Commissioner, Ghaziabad Municipal Corporation said: “This is a momentous occasion for us. The capital raised will not only enforce financial discipline but also pave way for the Corporation for a bigger fund raise, if needed, in the future. We saw an interest of 40 bids attracting a total subscription of Rs 401 Crore. This had come within minutes on bid date and that too with a very competitive coupon rate of 8.10%, which is one of lowest in Municipal Bonds in India. This is also the first ever green bond issued by any municipal corporation in India. This is just a reflection of trust of market in municipal bonds and Good Governance in the state of Uttar Pradesh."
The coupon rate of the taxable bond was fixed at 8.1% per annum and was rated AA by India Ratings and AA(CE) by Brickworks and has a maturity of 10 years with a staggered redemption.
On the occasion of the listing of the bonds, Ashish Kumar Chauhan, MD & CEO of Bombay Stock Exchange (BSE) stated: “I would like to congratulate Ghaziabad Nagar Nigam for successfully raising Rs 150 Crore by issuing Municipal Bond on BSE Bond platform. The order book was filled more than 4X in a matter of few minutes, which establishes Ghaziabad Nagar Nigam as a credible entity in the Indian bond market. The green bond market has immense potential and is an attractive opportunity for Indian municipalities to leverage funds for meeting clean and climate-resilient urban infrastructure targets for the nation. BSE Bond platform has helped bring in transparency and efficiency in price discovery for a private placement of debt securities and the platform enables to subscribe seamlessly,” he added.
On the success of the issue and muni bonds opportunities in India - A.K. Mittal, MD & CEO, A. K. Capital congratulated Ghaziabad Municipal Corporation for raising India’s first green Municipal bond of Rs 150 crore at an historical low rates in Municipal bond space. “We, at AK Capital Services Ltd, feel proud to be associated as Merchant Banker to the issue. Ghaziabad Municipal Corporation bonds are backed by strong structured payment mechanism making it a AA group ratings instrument, hence a good and secured investment with an attractive return for the investors" he added.
We are seeing rapid developments in the Indian Municipal Bond market with innovative structures and wide range of investor/s participation. After the success of Lucknow Muni and Ghaziabad Muni bond issuances, we expect that more ULBs will explore debt markets to raise funds via green bonds “.