Lucknow Municipal Corporation Bonds Listing: Rs 200 Crore Bonds Listed On BSE; Things You Should Know

The municipal bonds floated by the LMC with 10 year tenure offers 8.5 per cent interest, and have been oversubscribed by 250 per cent on its debut at the Bombay Stock Exchange

Image: ANI

In a first, a civic body in northern India Lucknow Municipal Corporation (LMC) bonds have been listed on the Bombay Stock Exchange (BSE) in Mumbai on Wednesday. The occasion was marked by the presence of Uttar Pradesh chief minister Yogi Adityanath. Yogi Adityanath Office had posted this tweet, "A new chapter will be written in the development history of UP, CM Shri @myogiadityanath Ji to ring the bell at @BSEIndia in Mumbai today for listing of bond of Lucknow Municipal Corporation. LMC`s bonds have witnessed an astounding oversubscription since it`s launch".

Here’s what you should know about the listing of LMC LMC is the first civic body in north India to issue Bonds under Atal Mission of Rejuvenation and Urban Transformation (AMRUT). How much amount has been raised? LMC has raised Rs 200 crore by issuing municipal bonds on private placement basis using BSE Bond platform. The bonds have been oversubscribed by 250 per cent on its debut at the Bombay Stock Exchange (BSE) on Friday. The municipal bonds floated by the LMC with 10 year tenure offers 8.5 per cent interest. On BSE BOND platform, the municipal corporation received 21 bids for Rs 450 crore, which is 4.5 times of the issue size, as per the BSE. As per the exchange, it was the eighth successful municipal bond issuance on the platform. Out of the total 11 municipal bond issuances totalling to Rs 3,690 crore, Rs 3,175 crore have been raised on BSE BOND platform scaling its market share to 86%, the exchange said.   Among the cities in UP, Lucknow and Ghaziabad had received A- credit rating in 2016-17 and emerged better for opting in debt market for raising funds under Atal Mission for Rejuvenation and Urban Transformation (AMRUT) compared to other regions including Varanasi, Kanpur etc. Of the 17 municipal corporations in UP, Lucknow and Ghaziabad are the largest with annual budget of nearly Rs 2,000 crore each, as per the Business Standard report. When was the decision to raise money through debt instruments taken? The decision to raise funds from the debt instruments was taken under the flagship Smart Cities Mission of the Centre to expand the financial pool of the respective municipal bodies for launching self sustaining infra and civil projects. In line with the Indore Municipal Corporation (IMC) in Madhya Pradesh listing its municipal bonds on National Stock Exchange (NSE), the Yogi Adityanath cabinet had last year approved the proposal of raising Rs 200 crore and Rs 150 crore respectively by the Lucknow and Ghaziabad municipal corporations.