Funds will be judiciously deployed in Sindhrot Water Supply Project as well as Liquid Waste Management Project
Delhi, Mar 26
Vadodara Municipal Corporation has decided to mobilize Rs.100 Cr against its contribution of Rs.224.30 in AMRUT Scheme. Total 14 works of various services of Rs.533.40 Cr we4e approved under AMRUT Scheme, out of which Rs.224.30 Cr was to be contributed by VMC as its own share. VMC’s Municipal Bond has been dual rated AA+/Stable and AA/Stable by India Rating & Research Pvt. Ltd. and CRISIL Rating Ltd. respectively. Requisite approvals from VMC’s General Board, Government of Gujarat, and Securities and Exchange Board of India (SEBI) have bewn already received.
Issue opened at 11.00 AM on Friday for online subscription on the Electronic Bidding Platform (EBP) of Bombay Stock Exchange. Vadodara Municipal Corporation (“VMC”) successfully raised Rs. 100 Cr by issuing Maiden Municipal Bond on Private Placement Basis using BSEBOND (EBP Platform). Amidst the prevailing pandemic conditions and global tension, it is indeed very prestigious for VMC aa it received 36 bids on BSEBOND platform for Rs. 1,007 Cr, 10.07 times of the issue size. Issue was oversubscribed by 4.52 times within a second of opening of the issue. VMC has received the subscription amount of Rs.100 Cr at a yield of 7.15%, which is lowest ever coupon rate in the category of Municipal Bond after SEBI Regulations for Municipal Bonds. By far this stands as the most competitive and lowest rate amongst Municipal Bond issuances in India.
VMC looks forward to judiciously deploy these funds in Sindhrot Water Supply Project, which will cater to the needs of drinking water supply in the city as well as Liquid Waste Management Project which will help in disposal of sewage water effectively. Smart Cities Mission, Ministry of Housing & Urban Affairs (MoHUA) has an arrangement with US Treasury Department to support six Indian cities to issue Municipal Bonds. Under this arrangement US Treasury Department provided Technical Assistance to VMC free of cost.
Vadodara is the second Municipal Corporation after Pune Municipal Corporation to avail the technical support of US Treasury Department along with five other cities i.e., Rajkot, Pimpri Chinchwad, Faridabad, Mysore and Mangaluru. Advisers of US Treasury and MoHUA Officers provided full support and Guidance during each stage of the Bond. Further VMC has also been eligible for incentive of Rs. 13 Crore from Central Government as it has been successful in raising money through bond before 31st March.