Munbai, Aug.27 (NSS): Amaravati Bonds worth INR 2,000 crore, the largest bond issue from a local authority, listed at 9:15 am on Bombay Stock Exchange (BSE) today. The issue received an oversubscription by 1.53 times.
Speaking on the occasion, Chief Minister Chandrababu Naidu said “My goal is to make Andhra Pradesh as best State in India by 2029. My government’s priority has been to build a non-corrupt, stable and peaceful society.
To make such a society economic growth must go hand-in-hand with inclusiveness and environmental sustainability. We have always adopted new approaches to fast track development and I am happy that we have opened up new funding options for development of Amaravati.
The success of the Amaravati Bond 2018 reflects the investor confidence in my government and the development of Amaravati. I want Amravati to be the happiest city incorporating the highest quality of infrastructure and a thriving economic environment,” he added
Titled ‘Amaravati Bond 2018’, the 10-year issue is offered at a fixed interest rate of 10.32% per annum, paid quarterly, with a 5 year moratorium on principal payment, which is redeemed on yearly basis for next five years at 20% every year.
The issue is guaranteed by the Government of Andhra Pradesh and is rated by CRISIL, Brickwork and Auicte. Messrs AK Capital Services officiated as the sole arranger.
Chief Minister Chandrababu Naidu had earlier mandated Andhra Pradesh Capital Region Development Authority (APCRDA) to explore innovative approaches to financing the capital city, which will highlight the financial efficiency, transparency and demonstrate project strength to investor community. Raising funds through bonds is key to APCRDA financial planning as it offers the flexibility to deploy funds to multiple works.
These funds are vital for making swift progress in green-field projects and realize the value potential of development works.
It may be noted that, funds through Bonds route can be mobilised without any security and funds are not project linked giving flexibility in financial planning to fund various ongoing Capital City projects simultaneously. The investor confidence in the Project will boost further investments into the capital city project in various sectors.
Speaking at the occasion, Cherukuri Kutumba Rao, Vice Chairman, Andhra Pradesh State Planning Board, said “To start-with, only a small portion of INR 2,000 crore in the entire project requirement of INR 48,115 crore of phase-I have been mobilized through Bonds to support the financial requirement of INR 10,000 crore within this financial year.
We have received keen interest from retail investors both in India and abroad and as directed by CM we will soon finalise modalities to make retail investors partners in Amaravati development.”
Amaravati is not only the people’s capital but is the economic powerhouse built on happy city principles and often referred to as the Indian growth story 2.0. Land required for Amaravati is largely assembled from the Voluntary Land Pooling Scheme, which is acclaimed as the world’s fastest and largest such scheme.
Over 33,000 acres is voluntary handed over by over 27,000 landowners, many of whom are farmers in record 2 months’ time in early 2015. Since then, Amaravati made envious progress in green-field city development, notifying the master plan in a record 1 year. On date, projects worth over 27,000 crores are underway and projects worth 11,000 crores are ready to be awarded. (NSS)