Indore Municipal Corp green bonds to open on February 10 to raise Rs 244 crore

6 Feb 2023 , 06:17 PM

Indore Municipal Corporation is raising Rs 244 crore through the public issue of green bonds in four separately, transferable and redeemable principal parts (STRPP). The issue will be opening for subscription from February 10 to February 14. Click here to apply in NCDs

These green bonds have different tenors of three years (STRPP A), five years (STRPP B), seven years (STRPP C), and nine years (STRPP D). It will be offering 8.25% payable half yearly and effective yield of 8.42%.

The corporation will use this money to set up a 60 mega watt (MW) solar power plant. The power generation from the water plant will be used to pull water from Narmada River. Indore Municipal Corporation would be the first municipal body to target individual investors.

The minimum application size of the green bond issue would be Rs 10,000 (or 10 NCDs) and thereafter in multiples of Rs 1,000. These bonds are proposed to list on NSE. As per offer document, each NCD of Rs 1,000 will comprise one STRPP A of a face value of Rs 250, one STRPP B of face value of Rs 250, one STRPP C of face value of Rs 250 and one STRPP D of face value of Rs 250. STRPP A will have a tenor of 3 years, STRPP B 5, STRPP C 7 and STRPP D 9 years.

The interest rate is not disclosed in DRHP and will be available in final document of the offer.

The proposed green bonds have been rated AA+ with a stable outlook by India Ratings & Research. However, Care Ratings has rated the issue AA with a stable outlook.

There is no specific tax benefit available to NCD holders in Income Tax Act, 1961. NCD holders need to pay short-term capital gain on interest income if hold for less than 12 months or long-term capital gain if NCD is hold for more than 12 months.

Indore has bagged the tag of cleanest city in India 6 consecutive times. It has a population of 35 lakh which is largely dependent on the water of Narmada River.

AK Capital Services Limited, SBI Capital Markets Limited, Vistra ITCL (India) Limited are the book running lead managers while KFin Technoligies is the registrar to the issue.