HYDERABAD: GHMC will raise Rs 200 crore through electronic bidding at Bombay Stock Exchange, Mumbai on August 13. In this connection, GHMC Commissioner B Janardhan Reddy held a meeting with investors in Mumbai on Tuesday for raising the second tranche of Rs 200 crore through municipal bonds.
This would be the second tranche from the Rs 1,000 crore allocated to be raised through municipal bonds for the ongoing Strategic Road Development Plan (SRDP). SRDP is a high priority project for Greater Hyderabad. The project comprises skyways (100 km), major corridors (166 km), roads (348 km), other roads (1,400 km) and as many as 54 grade separators and flyovers.
The Central Government has praised the efforts made by the GHMC on the bond issuance and as a token of encouragement to the GHMC, Central Government has accorded an incentive of Rs 26 crore to the GHMC for the bonds which have been raised for Rs 200 crore in the first phase in February. Commissioner also received incentive certificate from Prime Minister Narendra Modi a few days ago. The first tranche of Rs 200 crore was raised through electronic bidding on February 14.
It received overwhelming response with a subscription rate of 200 per cent. As per SEBI guidelines, all municipal bonds have to be listed either on Bombay Stock Exchange or National Stock Exchange. GHMC has opted for BSE Bond EBP platform. GHMC proposes to raise remaining Rs 600 crore in the current financial year, timing to depend upon prevailing market conditions.
What are municipal bonds?
Some urban local bodies raise money from the public through bonds that are floated on a stock exchange. These bonds are generally tax-free. Bangalore Municipal Corporation was the first body in the country to float such a bond in 1997.