India’s Ahmedabad Municipal Corporation has successfully accepted bids totaling Rs 200 crore ($24.1 million) for its inaugural green bonds, with a maturity period of five years, according to three bankers familiar with the matter on Monday.
Situated in the Western state of Gujarat, the city has set a semi-annual coupon rate of 7.90% for the bonds and had invited bids from bankers and investors earlier in the day.
SBI Capital Markets and Tipsons Consultancy Services are acting as the arrangers for this bond issue.
Nagesh Chauhan, the head of the debt capital market at Tipsons Group, commented on the overwhelming response to the bond issuance, stating, “The bond issue witnessed higher than anticipated interest from investors across classes. The issue saw subscription interest of more than 13 times the base size.”
He further added, “The issue attracted a lot of interest from institutional investors displaying confidence in the financial stability and debt servicing capabilities of the municipal corporation. This will boost sentiment in the municipal bond market, and we may see more issuances in the near future.”
This marks the second debt issuance by Ahmedabad Municipal Corporation, which previously tapped the bond market in 2019, raising 2 billion rupees through 5-year bonds at a coupon rate of 8.70%.
Additionally, this represents the second bond issuance by any municipal body in the current financial year, following Pimpri Chinchwad Municipal Corporation’s issuance of 2 billion rupees via five-year bonds at a coupon rate of 8.15% in July.