VIJAYAWADA: The State government’s plan to mobilise `1,000 crore through retail bonds for the construction of Amaravati has been put on hold for the time being. While the major reason for taking a step back is said to be the volatile market, another reason, the officials noted, is the impending political risk due to the elections.
“Now is not an ideal time to go for bonds as the market is not good. The interest rates are high. So, we scrapped the plan to float the bonds temporarily,” a top-ranking official told TNIE.The official added that APTRANSCO too had scrapped its plan to float bonds, owing to market risks. “The APTRANSCO planned to go for bonds about two months ago, but the idea had to be scrapped as the interest rate was over 11.5 per cent. Recently, the Rajasthan Electricity Board had to shell out higher rate to raise bonds. So, we dropped the plan,” the official reasoned.
It may be recalled that the Andhra Pradesh Capital Region Development Authority (APCRDA), buoyed by the success of institutional bonds through which it raised `2,000 crore in August last year, planned to issue bonds for the public in two tranches of `500 each by the first quarter of this year.
The APCRDA, which has not been dependent on the State finance department for funds, would now go for bonds issuance only after the new government is formed. “We will think about bonds only after the new government forms in the State. The markets are also expected to stabilise after the parliamentary election results are announced. So, depending on the next government’s decision, we will take a call on the future course of action,” the official added.
When asked if there was any problem in pooling in funds for Amaravati construction, the officials replied in the negative. “We have finalised a detailed plan and have already started tapping the loans extended by banks. So, there is no problem for now,” the official concluded.