Chennai Corporation lists municipal bonds worth ₹200 crore on NSE
The Chennai Municipal Corporation authority on Monday listed its Municipal Bonds worth ₹200 crores on the National Stock Exchange. The funds raised are intended to be used for the Integrated Storm Water Drainage System (ISWD) in the Kosasthalaiyar River Basin.
The issue of Greater Chennai Corporation’s Municipal Bonds received a good response as bids worth ₹421 crore (4.21 times more than the base issue size of ₹100 crore) were received, the Tamil Nadu government, said in a statement. The bonds with 10 year tenure carry an interest rate of 7.97 per cent per annum.
Tamil Nadu chief minister MK Stalin on Monday inaugurated the Listing Ceremony of the GCC Municipal Bonds in the presence of ministers and other officials.
“This reflects the strong faith investors have in Tamil Nadu and the GCC,” NSE chief economist Tirthankar Patnaik said, speaking at the listing ceremony at Chennai. He added that three other Municipal Corporations from Tamil Nadu — Coimbatore, Tiruppur and Tiruchi — were also in the process of raising funds through municipal bonds.
Around ₹100 crore each are set to be raised via bond issues in the next three cities, GCC Commissioner J. Kumaragurubaran, said. In addition, the Corporation will also receive an incentive of ₹26 crore as Urban Bond Issue Incentive under the Union government’s AMRUT 2.0 scheme. This will further reduce the cost of raising funds through Urban Bonds, he added.
The funds raised will be used for the Integrated Storm Water Drainage System (ISWD) in the Kosasthalaiyar River Basin, that entails an estimated cost of over ₹3,000 crore. The construction of this System has been undertaken in 46 packages, and as of May 22, 30 packages have been fully completed and the remaining are in progress, the state government said.
Credit rating agencies India Ratings and Acuité Ratings have rated the Municipal Corporation of Chennai as ‘AA+’, the state’s release added.
The listing ceremony saw the presence of Municipal Administration Minister K. N. Nehru, Mayor of Greater Chennai Corporation R. Priya, Chief Secretary N. Muruganantham, Chief Economist, National Stock Exchange Dr. Tirthankar Patnaik, Principal Secretary, Finance T. Udayachandran, Greater Chennai Corporation Commissioner J. Kumaragurubaran, and others.