Indore Municipal Corp to raise up to Rs 244 crore via public issue of green bonds; to open on February 10

The thinking behind issuing a green bond is to seek out international investors. (Representative Image)

Indore Municipal Corporation plans to raise up to Rs 244 crore through public issue of green bonds in four separately, transferable and redeemable principal parts (STRPP).

The issue will open for subscription on February 10 and closed on February 14.

According to the corporation, the green bonds will be offering 8.25 percent payable half yearly and effective yield of 8.42 percent.

The green bonds have a tenor of three years (STRPP A), five years (STRPP B), seven years (STRPP C), and nine years (STRPP D).

The officials of the corporation has said that the effective yield for the three, five and seven years bonds is 8.41 percent, whereas on the nine years it is just one basis points (bps) up at 8.42 percent.

One basis point is one hundredth of the percentage point.

The coupon offering on this green bonds is 132 bps over five year sovereign green bonds coupon and 113 bps over 10-year sovereign green bonds.

The net proceeds from the proposed bonds will be utilised for the installation of 60 MW Ground Mounted Capitive Solar PV Power Plant at Samraj & Ashukhedi village, Khargone district in Madhya Pradesh.

The green bonds is proposed to be listed on the National Stock Exchange of India (NSE).

The corporation has appointed AK Capital Services Ltd and SBI Capital Markets Ltd as lead managers to the issue. While, Vistra ITCL (India) Ltd and KFin Technologies Ltd has been appointed as trustee and registrar to the issue, respectively.

The bonds have been rated ‘AA’ with ‘Stable’ outlook by CARE and ‘AA+’ with ‘Stable’ outlook by India ratings & Research Private Ltd.

In the financial year 2021-22, the revenue income of the corporation was Rs 1,739.95 crore, as compared to Rs 1,508.10 crore in the year ago period.

While, expenditure of the corporation, excluding interest and depreciation was Rs 1,107.88 crore in FY22.

Total debt in 2021-22 stood at Rs 579.43 crore, lower than Rs 648.45 crore in the year ago period.

“The majority of the debt is related to construction activities conducted by the corporation in the city like sewage, roads construction, among others,” Pushyamitra Bhargava, Mayor of Indore city, Madhya Pradesh told Moneycontrol on the sidelines of conference.

He further added that the corporation has never delayed in servicing debt.