HYDERABAD: As the share market has been volatile for last few months, the GHMC, that had proposed to raise another Rs 305 crore for implementing the Strategic Road Development Plan (SRDP) through municipal bonds, has kept the proposal on hold. They have instead planned to raise the amount through Rupee Term Loan (RTL) as the interest rate could be lesser than municipal bonds, besides many companies are expected to participate in the tender process that could help GHMC in procuring funds at less interest rates from different banks.
Besides, the interest rate on municipal bonds is on the higher side which is around 9.50 percent to 9.80 percent. Under the Municipal Bonds, GHMC has proposed to raise Rs 1,000 crore in a phase-wise manner.
Previously, the GHMC had raised Rs 395 crore through municipal bonds in two tranches (Rs 200 crore in first tranche in February last year at coupon rate of 8.90 percent and Rs 195 crore in second tranche this year at a cut-off coupon rate of 9.38 percent). The funds were utilised fully for construction of skyways, major corridors, roads, grade separators and flyovers under SRDP project.
GHMC officials told Express that the corporation held a meeting with bankers on RTL issue a few days ago and where the banks hinted that coupon rate of interest can be offered by them at around 9.5 percent or lesser interest.
M/s SBI Capital Markets Limited, the arrangers for the GHMC, were told to prepare details for floating tenders on RTL. After the submission of the report in a week or two, tenders would be floated by this month end to raise Rs 305 crore under RTL, so that they could be utilised for completing the ongoing SRDP works.