Vadodara: The Rs 100 crore bonds issued by the Vadodara Municipal Corporation (VMC) will open for bidding next week. The civic body has got a nod from the Securities and Exchange Board of India (SEBI) for the bonds.
VMC is looking to issue the bonds to fund infrastructure projects under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). It will be the maiden bond issue brought out by the civic body. The intention of raising money through bonds was mentioned by the VMC in its budget presented in 2019. The civic body was later involved in hectic activities in direction of bringing out the bonds, including getting its accounts in order for the bonds as well as preparing the preliminary placement memorandum.
VMC chief accounting officer Santosh Tiwari said that the VMC is supposed to give a contribution of 30 per cent of works taken up under AMRUT. The total investment in these works that include those for water supply, sewage and storm water drains amounts to Rs 533.4 crore.
The central government will provide an incentive of Rs 13 crore to subsidise the interest burden on the civic body due to the bonds. The bonds got an AA+ rating from India Ratings and AA from CRISIL. The preliminary placement memorandum was presented to SEBI that gave a nod for the bonds earlier this week. The final placement of the bonds has also been done online.
Top VMC officials, including municipal commissioner Shalini Agarwalhave been holding a series of discussions with the top brass of various public and private sector companies, financial institutions and banks encouraging them to bid for the bonds. Sources said that going by the experiences of other civic bodies, the bonds would receive a good response. So far, 16 organisations have shown interest in VMC’s bonds.
VMC is looking to issue the bonds to fund infrastructure projects under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). It will be the maiden bond issue brought out by the civic body. The intention of raising money through bonds was mentioned by the VMC in its budget presented in 2019. The civic body was later involved in hectic activities in direction of bringing out the bonds, including getting its accounts in order for the bonds as well as preparing the preliminary placement memorandum.
VMC chief accounting officer Santosh Tiwari said that the VMC is supposed to give a contribution of 30 per cent of works taken up under AMRUT. The total investment in these works that include those for water supply, sewage and storm water drains amounts to Rs 533.4 crore.
The central government will provide an incentive of Rs 13 crore to subsidise the interest burden on the civic body due to the bonds. The bonds got an AA+ rating from India Ratings and AA from CRISIL. The preliminary placement memorandum was presented to SEBI that gave a nod for the bonds earlier this week. The final placement of the bonds has also been done online.
Top VMC officials, including municipal commissioner Shalini Agarwalhave been holding a series of discussions with the top brass of various public and private sector companies, financial institutions and banks encouraging them to bid for the bonds. Sources said that going by the experiences of other civic bodies, the bonds would receive a good response. So far, 16 organisations have shown interest in VMC’s bonds.