HYDERABAD: The State government on Tuesday gave permission to appoint SBI CAPS as the arranger for raising loans of Rs 2,500 crore through rupee term loan (RTL) by the Greater Hyderabad Municipal Corporation (GHMC). The funds thus raised will be utilised for Strategic Road Development Programme (SRDP) and other developmental works like flyovers, RoBs, RuBs and grade separators in the city.
It may be mentioned here that the State government had accorded permission to GHMC to borrow `1,000 crore through municipal bonds and Rs 2,500 crore through RTL as per the requirement of GHMC. There will be no Government Guarantee for the loans raised by the GHMC.
It also approved the SBI Capital Markets Limited to raise Rs 1,000 crore through bonds at a fee of 0.1 per cent of the funds raised exclusive of Goods and Services Tax (GST) and payment of `15 lakh for preparation of information memorandum for raising Rs 2,500 crore through RTL on nomination basis.
The State government has ordered to raise the RTL of Rs 2,500 crore through tenders. Since the corporation lacks sufficient manpower and expertise to take up the task of raising term loans, it had taken up the issue of utilising the services of SBI CAPS with the Standing Committee, which approved the proposal same last month.
Meanwhile, the proposal to raise municipal bonds for the remaining Rs 505 crore out of total Rs 1,000 crore has been kept in abeyance in view of the volatile share market in the country, besides high coupon rate.
The corporation has issued three series of bonds — series-1 (Rs 200 crore, coupon rate - 8.90 per cent), series-2 (Rs 95 crore, coupon rate 9.38 per cent), and series-3 (Rs 100 crore, coupon rate, 10.23 per cent).
In series-2, it was proposed to raise Rs 200 crore, but only Rs 195 crore could be mobilised with a coupon rate of 9.38 per cent. Whereas in series-3, it was proposed to raise Rs 305 crore (Rs 100 crore + Rs 205 crore in green shoe option), however only Rs 100 crore could be mobilised with a coupon rate of 10.23 per cent.