The municipal bonds issued by the Lucknow Municipal Corporation (LMC) were listed on the Bombay Stock Exchange (BSE) Wednesday with Uttar Pradesh Chief Minister Yogi Adityanath ringing the bell to mark the listing. The civic body of Uttar Pradesh’s capital city is the ninth in the country to have raised money through municipal bonds.
Municipal corporations are government bodies that typically form the third tier of the government in urban areas after the central and state government. They have their expenditures and sources of revenue.
Municipal bodies can also raise funds through bond issuances, called municipal bonds. The debt raised is from investors like pension funds.
LMC raised Rs 200 crore through municipal bonds on a private placement basis using the BSE bond platform. These taxable bonds have a tenure of 10 years and will fetch an 8.5 percent interest per annum. The bond issue proceeds will be used for infrastructure projects in Lucknow.
“It will augment our effort to improve infrastructure in urban areas,” said Uttar Pradesh Chief Minister Yogi Adityanath, who attended the listing ceremony in Mumbai.
The issue which opened on 13 November was subscribed 4.5 times. BSE CEO Ashish Chauhan said the order book for the issue was filled up in a ‘matter of minutes’.
LMC has raised funds under the new guidelines of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart Cities Mission.