As per ministry sources, after Pune Municipal Corporation’s (PMC) Rs 200 crore municipal bond offering that hit the BSE, as many as 26 cities with A+ and above credit rating are planning to raise over Rs 50,000 crore over the next three years.
The PMC’s bond issue received subscriptions worth nearly Rs 1,200 crore, with investors being major banks, insurance companies, mutual funds and pension funds. The bonds offered an interest of 7.59%.
So far, cities that have received the highest rating include Kolkata in West Bengal (AAA); Navi Mumbai (AA+), Pimpri Chinchwad (AA+), Pune (AA+), Nashik (AA), Mira Bhayandan (AA-), Thane (AA-), Vasai-Virar city (A-) in Maharashtra; GVMC (AA) and Vijaywada (A-) in Andhra Pradesh; Ahmedabad (AA), Surat (AA-) and Vodadra (A+) in Gujarat; NDMC (AA-) in Delhi; Kishangarh (A+), Jaipur (A-), Bhiwadi (A-), Jhunjhunu (A) in Rajasthan; GHMC (A+), Warangal (A) in Telangana; Indore (A+), Bhopal (A-) and Jabalpur (A-) in Madhya Pradesh; Lucknow (A-) in Uttar Pradesh and Mangaluru (A) in Karnataka.
Fifteen cities in the list have already appointed transactional advisers. These include Jaipur, Jabalpur, Ahmedabad, Visakhapatnam, Indore, NDMC, Kakinada, Udaipur, Bhopal, Warangal, Kota, Bhiwadi, Kishangarh, Greater Hyderabad Municipal Corporation (GHMC) and Panaji.
PMC, which has earned a long-term credit rating of AA+ indicating a stable outlook, is the second-largest corporation in Maharashtra that earns the bulk of its revenues from property taxes and local body taxes. PMC plans to use the municipal bonds funds for a 24X7 water supply project for the city, as it attempts to meet its Smart Cities mission.