The Pimpri Chinchwad Municipal Corporation may raise up to Rs 200 crore through green municipal bonds, people aware of the development told Moneycontrol.
A municipal bond is a debt instrument issued by a municipal corporation under municipal laws with the permission of the respective state government.
The corporation has not decided a date for the bond issue because it is awaiting approval from the state government and other relevant authorities, source said.
“The corporation will raise funds around Rs 200 crore, but are waiting for state government sanctions and other authorities approvals,” source said on condition of anonymity.
An email sent to the corporation for confirmation of the issuance remained unanswered.
On July 3, the corporation received ‘AA+’ ratings from CRISIL for the Rs 200 crore municipal green bonds.
The ratings agency said the ratings reflect the healthy revenue receipt led by building permission fees, revenue grants, and improvement in collection of property tax. If the issuance materialises, this is the second bond issuance by the corporation. On July 28, 2023, the corporation had raised Rs 200 crore through maiden municipal bonds maturing in five years.
Operating surplus, after dipping to Rs 345 crore in FY21 post the Covid-19 pandemic impacted period, has remained above Rs 1,100 crore from fiscals 2022-2024, according to CRISIL’s rating report. The operating surplus is expected to remain above Rs 1,100 crore over the medium term, limiting reliance on external funds to cover the capital expenditure (capex), the agency added.
The source added that the corporation will utilise these funds for the green projects in the city.
The corporation deployed these funds for the development of the Mula river from Wakad Bypass to Sangvi Bridge under the Pune River Rejuvenation Project, it said in a press release.
The corporation has set an 8.15 percent coupon on these five year bonds. “The issue was at a spread of 34 basis points (bps) over corresponding AA+ PSU FIMMDA,” PCMC said on July 28, 2023.
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