GHMC raises 100 cr via municipal bonds

Hyderabad: The GHMC Municipal Bond Series III phase, bidding for Rs 100 crore, successfully tapped the capital markets on Tuesday. It created a record in the country by secured bidding for Rs 100 crore from the capital markets and it is the only corporation in the country that hit the capital markets for third time, said a beaming Mayor Bonthu Rammohan here on Tuesday.

Elated over the response of capital market investors, the Mayor said the secured funds would be spent on the projects undertaken under the Strategic Road Development Plan (SRDP). With this amount, works like flyovers, underpass, bridges etc would be undertaken, he elaborated.

The bidding for GHMC municipal bonds opened at 11.30 am and soon bids poured in for Rs 100 crore well before 12.30 pm i.e., within an hour. The GHMC invited bidders from the prospective investors through the BSE. The bidding was conducted under the supervision of Additional Commissioners Sikta Patnaik and D Jayaraj Kennedy, Bombay Stock Exchange officials, SBI Capital Markets, SPA Securities, SBICAP Trustees, Karvy (RTA) MV KINI (Legal Advisor) and the Advisor to Municipal Department, Jayasree.

M Dana Kishore, the Commissioner, thanked the bidders for the overwhelming response.

The Greater Hyderabad Municipal Corporation (GHMC) in its earlier two biddings had raised Rs 200 crore and Rs 195 crore (A total of Rs 395 crore) through issue of municipal bonds in February 2018 and August 2018 respectively. With the funds raised in all three tranches, GHMC has achieved the distinction of being the largest municipal bond route utiliser in the country.

The Municipal Corporation raised funds through the bond market following the suggestion of Prime Minister Narendra Modi, to part-finance the state projects. In order to part finance Strategic Road Development Project (SRDP), the political and administrative leadership of Telangana decided to adopt the route suggested by the Prime Minister.

GHMC will also become the largest recipient of the incentive/grant from Ministry of Housing & Urban Affairs (MoHUA), GOI, totalling Rs 52 crore, including for this issue, thus bringing the borrowing cost of GHMC substantially lower, showing the financial prudency of the organization.

Therefore, the success of this issue is a historic and a watershed moment in the financial governance of the local bodies.

Telangana government takes pride in taking forward the mission of the Central government for more and more urban local bodies accessing the capital markets for their funding requirements.