Vadodara Municipal Corporation raises 100 cr through municipal bond

“VMC’s Municipal Bond has been dual rated AA+/Stable and AA/Stable by India Rating & Research Pvt. Ltd. and CRISIL Rating Ltd. Respectively. Requisite approvals from VMC’s General Board, Government of Gujarat, and Securities Exchange Board of India (SEBI) were already received,” the VMC said in a release on Thursday.

“The VMC bond issue opened at 11.00 am for an online subscription on the Electronic Bidding Platform (EBP) of the Bombay Stock Exchange… Amidst the prevailing pandemic conditions and global tension, it is indeed very prestigious for VMC to receive 36 bids on BSEBOND platform for Rs. 1,007 crore, 10.07 times the issue size. The issue was oversubscribed by 4.52 times within a second of the opening of the issue,” the release said.

The VMC has received the subscription amount of Rs 100 crore at a yield of 7.15 per cent which is the lowest ever coupon rate in the category of Municipal Bond after SEBI Regulations for Municipal Bonds. “By far this stands as the most competitive and lowest rate amongst Municipal Bond issuances in India,” the release said.

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.

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