Earlier, November this year, LMC received 21 bids on BSE Bond platform for Rs 450 crore. Picture courtesy: ANI
The 200-crore Lucknow Municipal Corporation (LMC) bonds have been listed on Bombay Stock Exchange (BSE) right now. Uttar Pradesh Chief Minister Yogi Adityanath attended the bell ceremony. With today’s listing, Lucknow has develop into the 1st city in north India and ninth city in India to have raised funds by issuing municipal bonds. Last month, LMC had raised Rs 200 crore by issuing municipal bonds on a private placement basis working with the BSE Bond platform. Earlier, November this year, LMC received 21 bids on BSE Bond platform for Rs 450 crore, which is 4.5 occasions of the total concern size of Rs one hundred crore, a statement stated.
Municipal bonds to fetch 8.5% interest
The municipal bonds present 8.5 per cent interest per annum and have tenure of 10 years. The proceeds of the concern are proposed to be invested in a water provide project getting implemented beneath AMRUT (Atal Mission for Rejuvenation and Urban Transformation) scheme of the government and a housing project. This bond concern from Lucknow Municipal Corporation is rated ‘AA’ by India Ratings and ‘AA (CE)’ by Brickwork Ratings.
According to the Ministry of Housing and Urban Affairs, it is structured as a ‘strip’ bond with 7 STRRPs (A to G) and principal repayment to take place in 7 equal annual payments from the 4th year to the 10th year. In addition to asset cover, a structured payment mechanism has been place in spot to make sure timely payment of each principal and interest obligations.
LMC to assist realize ‘Atmanirbhar Bharat’ target
Uttar Pradesh Chief Minister Yogi Adityanath stated “In COVID times, Lucknow Municipal Corporation will progress towards achieving the ‘Atmanirbhar’ goal with the listing of municipal bonds worth Rs 200 crores. The Corporation is committed to improving the lives of the citizens living in its jurisdiction: UP CM Yogi Adityanath”. The Housing and Urban Affairs Ministry added that in the coming months, the municipal corporations of Ghaziabad and then other cities such as Varanasi, Agra and Kanpur will also concern municipal bonds, followed by a pooled municipal bond concern from some of the smaller sized municipal entities in the state.