Vadodara Municipal Corporation Raises 100 Crore Via Municipal Bonds

Vadodara Municipal Corporation (VMC) Thursday received 36 bids on the BSE BOND platform for Rs 1,007 crore, which is 10 times the issue size. The bond was meant to raise the sum for a contribution of Rs 224.30 crore of the civic body for 14 projects under the AMRUT scheme. The civic body successfully raised Rs 100 crore through its maiden Municipal Bond issued on a Private Placement Basis on the Bombay Stock Exchange.

BSE is the preferred choice amongst Municipal Corporations to raise debt. With the successful fund raising of VMC on BSEBOND platform, BSE now hits a new benchmark of raising a total of Rs.3425 Crore in the Municipal Bond Space with a whooping market share of close to 88 per cent.

Speaking on this occasion Shri Ashishkumar Chauhan, MD & CEO, BSE said, “We are glad that Vadodara Municipal Corporation has raised Rs. 100 Crores successfully using the BSEBOND Platform, a market leading platform for raising bonds in India. BSE firmly believes that Indian Bond Market is ready to expand its horizon manifolds and these borrowings can be judiciously deployed to augment infrastructure needs & Smart City planning.”

Keyur Rokadia Mayor of Vadodara Municipal Corporation and Shalini Agarwal, IAS, Commissioner of Vadodara Municipal Corporation said, “Amidst the prevailing pandemic conditions and global tension, it is indeed very prestigious for VMC to get a massive oversubscription of 10.07 times for its first-ever Municipal Bond issuance of Rs. 100 Crore. By far this stands as the most competitive and lowest rate amongst Municipal Bond issuances in India.”

“VMC hereby looks forward to judiciously deploying these funds in the Sindhrot Water Supply Project, which will cater to the needs of drinking water supply in the city as well as the Liquid Waste Management Project which will help in the disposal of sewage water effectively. We are extremely happy about our experience with BSEBOND platform and the operational support of the BSE Team all throughout the transaction.”

The VMC has also been eligible for an incentive of Rs 13 crore from Central Government as it has been successful in raising money through bonds before March 31. Therefore, the effective coupon rate will be Rs 4.55 per cent per year to make a total of 22.75 per cent for a period of five years.