AMC’s bond issue fully subscribed in 2 minutes

AHMEDABAD: In an unprecedented construction, the Rs 100 crore bond issue of the Ahmedabad Municipal Corporation (AMC), together with a green shoe possibility for the equal amount, used to be absolutely subscribed in simply two mins. What’s extra, the issue used to be oversubscribed 10 times in a single hour, with bids worth Rs 1,085 crore received.

Because of the green shoe possibility for an extra Rs 100 crore, AMC has raised Rs 200 crore from the bond market.

“AMC has created a historical past in the municipal bond market. This turns into essentially the most subscribed municipal bond issue in independent India. The online bidding opened at 11.30am on Friday and by 11.32am we had been absolutely subscribed. In the following hour, the total bids swelled to 10 times the sum,” said AMC commissioner Vijay Nehra.

“This is the highest ever oversubscription received by any municipal company in the country,” he added.

Interestingly, AMC officers and advisors had been anxious in regards to the bond issue as a couple of week ago the Visakhapatnam Municipal Corporation received a relatively lukewarm response to its bond issue, which remained undersubscribed.

“Anxious, we made up our minds to take a calculated move with a possibility mitigation mechanism in position. Rather than going for a Rs 200 crore bond issue, we made up our minds to head for Rs 100 crore issue with a green shoe possibility for an additional Rs 100 crore,” he added.

Bids had been received from all classes of buyers akin to banks, number one dealers, pension finances and different financial institutions. The proceeds of the issue will likely be used to finance the initiatives beneath the ‘AMRUT’ scheme.

“The confidence of institutional buyers can be attributed to the credibility of AMC in the financial markets, its tough financial well being and structured payment mechanism,” AMC said in a commentary.

Back in 1998, the AMC had for the primary time tapped the bond market with a Rs 100 crore issue, which used to be the primary issue by a municipal company in all of South East Asia. With its latest offering, AMC has for the fifth time successfully raised finances from the bond market.

AMC’s bond issue fully subscribed in 2 minutes AMC’s bond issue fully subscribed in 2 minutes Reviewed by kailash soni on January 12, 2019 Rating: 5
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