COIMBATORE: The Coimbatore City Municipal Corporation (CCMC) has successfully raised Rs 150.85 crore through its maiden municipal bond issue, which received an overwhelming response from investors and was oversubscribed nearly three times.
The bonds were issued on a private placement basis at a coupon rate of 8.29%.
Against a base issue size of Rs 70 crore, bids worth about Rs 210 cr were received on the Electronic Bidding Platform of the National Stock Exchange, reflecting strong investor confidence in the civic body's financial health and project viability.
The funds mobilised through the bond issue will be utilised for setting up additional infrastructures in the two major initiatives such as the Underground Sewerage Scheme in the Kurichi and Kuniyamuthur areas, covering Wards 87 to 100, and the Semmozhi Park Botanical Garden in the city.
Officials said the State government had granted permission to raise funds through municipal bonds specifically for these projects, while proposals related to solar power generation for meeting electricity requirements such as street lighting and treatment plants were not cleared.
Civic officials noted that municipal bond-funded projects are eligible for grants from the Centre and the State, with an incentive of Rs 12 cr for every Rs 100 cr raised. The first tranche of such grants has already been assured.
The bond proceeds are expected to be credited within two weeks, officials added, stating that investors assessed CCMC's revenue and expenditure profile before participating in the issue.