GHMC seeks more arrangers to bid for SRDP works

  • | Sunday | 13th October, 2019

GHMC wants to increase scope participation of arrangers to mobilise more funds and better coupon rate for speedy implementation of Strategic Road Development Plan (SRDP) in Hyderabad. In view of this, GHMC has proposed to give opportunity for more number of arrangers to participate in the bidding process along with the existing arranger ie, SBI Caps. With this arrangement, GHMC has issued three series of bonds, Series-I, Rs 200 crore with coupon rate of 8.90 per ceny, Series-II, Rs 195 crore with coupon rate of 9.38 per cent and Series-III, Rs 100 crore with coupon rate at 10.23 per cent. Among all the bidders, the ones with the lowest coupon rate to an extent of Rs 20 crore and above would be eligible for arranger fee. This will not result in any additional financial liability on GHMC as the arrangers fee of 0.10 per cent approved by the State government, will be paid to the eligible arranger.

S Bachan Jeet Singh By Express News Service HYDERABAD: Greater Hyderabad Municipal Corporation (GHMC) has proposed to give chance for more number of arrangers to participate in the bidding process for raising municipal bonds along with the existing arranger ie, SBI Caps. GHMC wants to increase scope participation of arrangers to mobilise more funds and better coupon rate for speedy implementation of Strategic Road Development Plan (SRDP) in Hyderabad. The proposal to have more number of arrangers was decided by GHMC because despite continuous follow up and persuasion by the officials with the present arrangers, the fund mobilisation is less than the municipal bonds issue amount and increased coupon rates. In view of this, GHMC has proposed to give opportunity for more number of arrangers to participate in the bidding process along with the existing arranger ie, SBI Caps. This would open up the competition universally by keeping a minimum mobilisation criteria of `20 crore by selecting the option of all arrangers on the Electronic Bidding Platform (EBP) of Bombay Stock Exchange (BSE) Ltd, may decreased the coupon rate. The GHMC Standing Committee has approved the proposal last week and the same would be forwarded to the State government for issuing orders. GHMC officials said that the corporation has appointed SBI Capital Markets Limited as the arranger for raising Rs 1,000 crore through bonds at a fee of 0.1 per cent of the funds raised exclusive of GST. With this arrangement, GHMC has issued three series of bonds, Series-I, Rs 200 crore with coupon rate of 8.90 per ceny, Series-II, Rs 195 crore with coupon rate of 9.38 per cent and Series-III, Rs 100 crore with coupon rate at 10.23 per cent. In Series-II, GHMC proposed to raise per cent 200 crore but could mobilise only Rs 195 crore with a coupon rate of 9.38 pc and in Series-III it was proposed to raise Rs 305 crore but mobilised Rs 100 crore only with a coupon rate of 10.23 per cent, they said. Among all the bidders, the ones with the lowest coupon rate to an extent of Rs 20 crore and above would be eligible for arranger fee. This will not result in any additional financial liability on GHMC as the arrangers fee of 0.10 per cent approved by the State government, will be paid to the eligible arranger.

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