HYDERABAD: The grand plans of Greater Hyderabad Municipal Corporation (GHMC) to raise Rs 305 crore through municipal bonds received a jolt on Tuesday as it fetched only Rs 100 crore at a coupon rate of 10.23 per cent. The net interest after central government incentive of Rs 13 crore to GHMC is around nine per cent.
The third tranche of GHMC’s municipal bonds were opened for bidding at GHMC’s head office through electronic bidding platform of Bombay Stock Exchange (BSE), but the response from investors was lukewarm. The lukewarm response is due to the volatile share market prevailing for last few weeks, however GHMC officials said that the corporation created history in the Municipal Bond’s market in India.
Even in the prevailing condition of economy facing slow down, the GHMC successfully secured bidding for Rs 100 crore, said they. With this issuance, GHMC has also become the largest municipal bond route utiliser in the country.
The electronic bidding was opened at 11.30 am and within an hour, bidding for Rs 100 crore was received.
The GHMC invited the bidders from the prospective investors through BSE, and six bidders took part.
GHMC will wait for another month to see if some improvement is seen in the capital market, and then will go for another round of bidding for the balance Rs 205 crore, said GHMC Mayor, Bonthu Rammohan.
The amount raised from the bonds will be utilised for implementing the Strategic Road Development Plan (SRDP).