Merchant banking for Hyderabad civic body: Nine banks, FIs in race 

For the first time, the cash-strapped GHMC proposes to raise 2,500 crore from RTL and Rs 1,000 crore through municipal bonds.

Published: 11th March 2017 06:14 AM  |   Last Updated: 11th March 2017 06:14 AM   |  A+A-

By Express News Service

HYDERABAD: As many as nine banks and financial institutions have come forward to act as merchant banker to raise rupee term loan (RTL) as well as municipal bonds for the Greater Hyderabad Municipal Corporation (GHMC) for raising a total of Rs 3,500 crore. For the first time, the cash-strapped GHMC proposes to raise 2,500 crore from RTL and Rs 1,000 crore through municipal bonds. 

GHMC commissioner B Janardhan Reddy held a pre-bid meeting with representatives of nine merchant bankers and financial institutions approved by the central government at the civic body’s head office here on Friday.

Senior officials from SBI Capital Market Ltd, Yes Bank, ICICI, Axis Bank, AK Capital Service, Darashaw & Company Pvt Ltd, ICRA Management Consulting Services Ltd, SPA Capital Advisors Ltd, Srei Infrastructure Finance Ltd participated in the meeting.

The main objective of the meeting is to raise funds for overall development of the city and make the city world-class. Preference will be given to those who quote low charges for raising the required funds, the commissioner said.

The GHMC wants to use the funds to execute the government’s ambitious projects such as two-bedroom houses for the poor and weaker sections and the Strategic Road Development Plan (SRDP) in the twin cities.

GHMC officials said the bidding merchant banker should have a valid Securities and Exchange Board of India (SEBI) registration certificate as a category-1 merchant banker and be empanelled with the ministry or urban development (MoUD) as a technical advisor for issuing municipal bonds and should have acted as an arranger for at least one issue of municipal corporation as per prime database.

The merchant banker will advise the GHMC on the regulatory norms and assist it in securing necessary approval and exemptions  from regulatory agencies including SEBI, stock exchanges and RBI, and also provide assistance to GHMC in the selection of various intermediaries to the non-convertible debenture (NCD) issue such as the registrar and transfer agent, debenture trustee and coordinating with these intermediaries.

Of the Rs  3,500 crore to be raised, over Rs  1,210 crore will be utilised for construction of 50,000 units of 2BHK houses in the city and Rs  2,090 crore for taking up the major SRDP which includes construction of multilevel flyovers, grade separators and junctions at 20 important places in the first phase. The estimated cost of SRDP is around Rs  22,000 crore.

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