HYDERABAD :The bonds issue by the Andhra Pradesh government entity Capital Region Development Authority (CRDA), the nodal agency for construction of Greenfield capital city at Amaravati, has witnessed a record 1.53 times oversubscription, enabling it mobilise Rs 2,000 crore of funds.
The bonds issue titled Amaravati Bond 2018 is being considered Indias largest bonds issue till date from any local authority. The issue was guaranteed by the Andhra Pradesh government and was rated by CRISIL, Brickwork and Auicte, while AK Capital Services has acted as the sole arranger.
The development comes at a time when the ruling Telugu Desam Party (TDP) has severed ties with the Bharatiya Janata Party (BJP) government at the Centre protesting lack of support and deciding to mobilise the required funds from the open market.
“The bonds issue oversubscription has helped us raise Rs 2,000 crore, surpassing the cumulative funds of Rs 1,800 crore raised by various municipalities across the country till date,” said Cherukuri Kutumba Rao, vice chairman of the Andhra Pradesh State Planning Board.
While the bonds issue was for Rs 1,300 crore, the CRDA has decided to retain the additional subscription of Rs 700 crore by exercising the green-shoe option for bonds that carry a coupon rate of 10.32per cent payable quarterly, said Rao.
“We have decided to use the proceeds of Rs 2,000 crore as equity pool and keep investing towards equity contributions for various infrastructure projects of Greenfield capital city construction at Amaravati to be taken up through various special purpose vehicles,” Rao told ET.
The Andhra Pradesh government had assembled the land of over 33,000 acres required for the capital city construction at Amaravati from over 27,000 farmers through a voluntary land pooling scheme.
In a statement, CRDA said some Rs 27,000 crore worth projects are underway at Amaravati now and projects worth Rs 11,000 crore were ready to be awarded.
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