Indore Municipal Corporation to raise Rs 250 crore by issuing Green Municipal Bonds

28 Dec 2022 , 01:50 PM

Indore Municipal Corporation plans to list Green Municipal Bonds to raise up to 250 crore. The civic body will be using 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. Click here to apply in NCDs.

As per DRHP, the body will issue the non-convertible debentures (NCDs) with a face value of Rs 1,000 each comprising four separately transferable and redeemable principal parts (STRPP). 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 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. 

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 held for less than 12 months or long-term capital gain if NCD is held for more than 12 months.

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

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.