In a historic first for North India, the bond of Lucknow Municipal Corporation (LMC) got listed on the Bombay Stock Exchange in the presence of Uttar Pradesh Chief Minister Yogi Adityanath. Making it memorable, CM Yogi participated in the traditional ‘ringing bell ceremony’ to release the bond in Heritage Hall of BSE on Wednesday and described the listing of the bond as ‘the starting of a new era’ in the history of the state. He said that the listing of Rs 200 crores Municipal Bond is a step ahead of UP on the path of ‘self-reliance’. “Uttar Pradesh will play a pivotal role in fulfilling the commitment of Prime Minister of Atmanirbhar Bharat,” CM stated.
An elated UP CM said that the ranking of the bond manifests the faith of investors, entrepreneurs, and the industry in the policies of Uttar Pradesh. “Besides providing basic and infrastructure facilities to the people of the state and ensuring the development, the state has achieved 2nd rank in Ease of Doing Business making a massive jump over the past years,” CM stated while pointing out that the biggest state of the country in terms of population and the 3rd biggest economy of the country is taking giant strides towards industrialization and making value addition of its people.
Yogi stated, “This step is important to change the fundamental work culture of Municipal corporations in the state and will help not only Lucknow in augmenting infrastructural facilities and funding but also motivate other corporations. To work in such a direction, “Ghaziabad Municipal corporation will soon bring its bond in BSE,” the CM said in the presence of entrepreneurs, investors, and BSE officials.
Speaking on this momentous occasion, the CM further added, “It is a matter of pride for UP that the Lucknow Municipal Corporation has raised Rs 200 crore through its bond issue which got listed on BSE today. It is the trust of the investors which UP has earned during the last three and a half years of governance. It will augment our effort to improve infrastructure in urban areas and it shows the improvement in the Industrial climate of the state and the trust the investors have reposed in the state machinery”
The Lucknow Municipal bond had received 21 bids and subscribed by 4.5 times. The corporation received bids for an Issue size of Rs 200 Crs within 60 seconds of the issue opening, which opened for subscription on 13th November 2020. It’s one of the 8 cities in India that have capitalized on the new guidelines to fund the AMRUT and Smart Cities Mission to raise an aggregate of 3690 crores as per Govt released data.
The capital raised is proposed to partially fund the AMRUT projects and other infrastructure projects which had an earmarked requirement of Rs 3,10.95 crores. The AA Stable and AA(CE) Stable rated bonds by India and Brickwork Ratings have a tenure of 10 years and state that the principal amount will be paid in 7 installments from the 4th and 10th year.
The coupon rate of the taxable bond was fixed at 8.5% per annum. The actual cost of borrowing will be approx. 7.25% after considering Rs 26 Crs incentive from Government of India for raising Municipal Bonds
On the occasion of the listing of the bonds, Ashish Kumar Chauhan, MD & CEO of Bombay Stock Stated “I would like to congratulate Lucknow Municipal Corporation for successfully raising Rs. 200 Crore by issuing Municipal Bond on BSE Bond platform. The order book was filled more than double in a matter of few minutes establishes Lucknow Municipal Corporation as a credible entity in the Indian bond market.”
The Chief Minister also said that his government has been encouraging the MSME units of the state for listing in NSE and BSE. So far 15 units have taken steps to meet their financial needs by listing on BSE. “The policies of the Uttar Pradesh government are investment-oriented. We are constantly striving for simplicity and ease for investors. In recent times, due to the single window system, the needs and expectations of investors are being suitably addressed,” he added.
He said, “the state has received unprecedented support from the industry at the Uttar Pradesh Investor Summit and this effort will continue. Now a defence corridor is being established in UP, which will be important in making the country a global hub in the field of defense production.”
On this occasion, Mayor of Lucknow, Samyukta Bhatia; UP Industry Minister, Satish Mahana; UP Minister of MSME and Export Promotion, Siddharth Nath Singh; UP Urban Development Minister, Ashutosh Tandon; Additional Chief Secretary, Information, Navneet Sehgal; Add Chief Secretary, Home, and Chairman UPEIDA, Awanish Kumar Awasthi and other senior UP officials were also present.