After successfully mobilising ₹2,000 crore from the primary capital market through the Bombay Stock Exchange (BSE), the A.P. Capital Region Development Authority (CRDA) is preparing to get the ‘Amaravati bonds’ listed on it (BSE) on August 27 as per the Securities and Exchange Board of India (SEBI) mandate and tap retail investors as the next step in its fund-raising exercise.
“The CRDA will then issue Masala (rupee-denominated) bonds through the London and Singapore stock exchanges as the Amaravati project crosses its critical milestones one by one,” said CRDA Commissioner Cherukuri Sreedhar.
Big achievement
Speaking to The Hindu , Mr. Sreedhar said the good response received for the Amaravati bonds reflected the investor confidence in the capital city project, and the fact that the instruments were unsecured and CRISIL gave them A+ rating was a significant achievement.
Besides, crowd-sourcing (of funds) was being thought for specific projects.
“The CRDA has already tied-up funds amounting to nearly ₹48,000 crore from various institutions, including the World Bank (WB),” he added.
CRDA additional commissioner V. Rama Manohara Rao said Chief Minister N. Chandrababu Naidu was keen on issuing retail bonds, for which the modalities were being worked out meticulously in order to fully comply with the SEBI guidelines, and pointed out that the A+ rating was well above BBB, which was considered an investment grade.
As far as the proposed issuance of bonds to retail investors, a fresh credit rating should be obtained, he said, and asserted that the coupon rate of 10.32% fixed for the Amaravati bonds was market-driven.
WB loan
A loan of $715 million from the WB was expected to be ready in about a couple of months, and a consortium of banks, comprising Andhra Bank, Indian Bank, and Vijaya Bank, sanctioned a loan of ₹2,060 crore.
HUDCO had already given ₹1,275 crore out of ₹7,500 for which am MoU was signed earlier.
An additional ₹10,000 crore was planned to be raised from commercial banks for road and other infrastructure works.
The CRDA submitted two DPRs for a total amount of approximately ₹39,000 crore almost a year ago, and they were under scrutiny by the NITI Aayog.
The London and Singapore stock exchanges have promised to help the CRDA in procedural aspects of raising funds through them and connecting to the investors.
