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India’s First 150 Cr Ghaziabad ‘Green Bond’ lists on the BSE Bond Platform

Delhi, 8 April, 2021: The Ghaziabad Municipal Corporation which raised 150 crs (Base Issue: 100 cr with the green shoe option of 50 crs) via Municipal Bonds on private placement basis using the BSE bond platform listed on the exchange today and was open for subscription on 31 March, 2021.

The coupon rate of the taxable bond was fixed at 8.1% per annum and were rated AA by India Ratings and AA(CE) by Brickworks and has a maturity of 10 years with a staggered redemption. Additionally, the municipal corporation has received a Rs 19.5 Crs incentive from Government of India for raising Municipal Bonds

The municipal corporation has entered into an understanding with Sahibabad Industries Association for the purpose of achieving various goals and objectives relating to water supply and the capital raised is proposed to partially fund the tertiary sewage and water treatment plant which is estimated to cost approximately Rs 239.93 crs.

Commemorating the occasion, MS Tawar, Municipal Commissioner, Ghaziabad Municipal Corporation said “A momentous occasion and the capital raise will not only enforce financial discipline but also gives the corporation a chance to come out with a bigger fund raise in the future. We saw an interest of 40 bids attracting a total subscription of Rs 401 crs that came in within minutes on bid date and that too with a very competitive coupon rate of 8.10%. This is also the first ever green bond issued by any municipal corporation in India. This is just a reflection of trust of market in municipal bonds and good governance in the state of Uttar Pradesh.”

On the occasion of the listing of the bonds, Ashishkumar Chauhan, MD & CEO of Bombay Stock stated“I would like to congratulate Ghaziabad Nagar Nigam for successfully raising Rs. 150 cr by issuing Municipal Bond on BSE Bond platform. The order book was filled more than 4X in a matter of few minutes, which establishes Ghaziabad Nagar Nigam as a credible entity in the Indian bond market. I would also like to congratulate the entire UP administration under the leadership of Shri. Yogi Adityanath ji for his forward looking and transparent policies in adopting market-based borrowings as a means to achieve growth and provide modern basic facilities for urban centers. The green bond market has immense potential and is an attractive opportunity for Indian municipalities to leverage funds for meeting clean and climate-resilient urban infrastructure targets for the nation. The BSE Bond platform has helped bring in transparency and efficiency in price discovery for placement of debt securities and the platform enables to subscribe seamlessly.”

On the success of the issue and muni bonds opportunities in India –  Mr A.K. Mittal, MD & CEO, A. K. Capital stated “Congratulations to Ghaziabad Municipal Corporation for raising India’s first green Municipal bond of INR 150 crores at historical low rates in Municipal bond space. We, AK Capital Services Ltd, feel proud to be associated as Merchant Banker to the issue.  Ghaziabad Municipal Corporation bonds are backed by strong structured payment mechanism making it a AA group ratings instrument, hence a good and secured investment with an attractive return for the investors. We are seeing rapid developments in the Indian Municipal Bond market with innovative structures and wide range of investor/s participation. After the success of Lucknow muni and Ghaziabad muni bond issuances we expect that more ULBs will explore debt markets to raise funds via green bonds “

The Merchant bankers to the bond issue were A.K. Capital Services Ltd and HDFC Bank Ltd

About Mahender Bansal

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