Greater Hyderabad MC has successfully raised its second tranche of funds through issue of bonds at the Bombay Stock Exchange (BSE) for its Strategic Road Development Plan (SRDP) on Monday.
Against the ₹200 crore intended to be raised, the corporation has raised ₹195 crore at the cut off coupon rate of 9.38%, a statement from Additional Commissioner (Finance) Jayaraj Kennedy said, claiming the GHMC had thereby become the largest municipal bond issuer in the country.
Though the issue size was only ₹100 crore on the Electronic Bidding Platform of BSE, the option of ‘Green Shoe’ for an equal amount was exploited to raise ₹200 crore.
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Green Shoe option refers to the opportunity of over-allotment for additional price stability to a security issue, insured by the underwriter.
Though the overall subscription was almost 250%, the GHMC decided to retain only ₹195 crore at the cut off rate, the statement said.
The subscribers/investors in the bonds include SBI Capital Markets (₹80 crore), Axis Bank (₹50 crore), SBI pension fund (₹25 crore), ICICI Bank (₹15 crore) and ECL Finance (₹25 crore).
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The bidding meeting was participated by Mayor Bonthu Ram Mohan, Commissioner B. Janardhan Reddy, Municipal Administration and Urban Development Advisor Jayashri Viswanathan, and representatives of GHMC’s transaction advisors SPA Capital Advisors, arrangers SBI Capital Markets and BSE.
Earlier in February, the GHMC had raised ₹200 crore by the issue of bonds at BSE, at a coupon rate of 8.9%. In appreciation of the move, the Centre had granted ₹26 crore incentive.