The Vadodara Municipal Corporation (VMC) on Thursday received 36 bids worth Rs 1,007 crore on the BSE bond platform.
The civic body successfully raised Rs 100 crore through its first municipal bond issued on a private placement basis on the Bombay Stock Exchange.
- Last Update:March 25, 2022 at 4:50 pm IST
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The Vadodara Municipal Corporation (VMC) on Thursday received 36 bids on the BSE Bond platform for Rs 1,007 crore, which is 10 times the issue size. The bond was to raise funds for the civic body’s contribution of Rs 224.30 crore for 14 projects under the AMRUT scheme. The civic body successfully raised Rs 100 crore through its first municipal bond issued on a private placement basis on the Bombay Stock Exchange.
BSE is the preferred option among municipal corporations to raise debt. With the successful fund raising of VMC on the BSEBOND platform, BSE now achieves a new benchmark of total raising of Rs 3425 crore with a market share of close to 88 per cent in the municipal bond space.
Speaking on the occasion Shri Ashish Kumar Chauhan, MD & CEO, BSE said, “We are glad that Vadodara Municipal Corporation has raised Rs. 100 crores successfully using the market leading platform BSEBOND platform to raise bonds in India. BSE firmly believes that the Indian bond market is poised to expand its horizons manifold and these borrowings can be judiciously positioned to meet infrastructure needs and smart city planning.
Keyur Rokadia Mayor, Vadodara Municipal Corporation and Vadodara Municipal Corporation Commissioner Shalini Agarwal said, “Amidst the current pandemic situation and global tension, it is indeed very prestigious for VMC to get a massive oversubscription of 10.07 times for the first time. Issuance of Municipal Bond of Rs. 100 crores. This is by far the most competitive and lowest rate among municipal bond issuers in India.”
“VMC hereby expects to deploy these funds judiciously in the Sindhrot Water Supply Project, which will meet the drinking water supply needs in the city as well as the Liquid Waste Management Project which will help in effective disposal of sewage water. Will do We are extremely happy about our experience with the BSEbond platform and the operational support of the BSE team throughout the transaction.
The VMC is also eligible for an incentive of Rs 13 crore from the central government as it has been able to raise funds through bonds before March 31. Therefore, the effective coupon rate would be 4.55 percent per year, making the total 22.75. percentage for a period of five years.
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