In A First In India, Municipal Bond Issue For Retail Ends Tomorrow; Should You Invest?

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In A first-of-its kind initiative IndiaThe Indore Municipal Corporation (IMC) won Rs On the first day, 661.52 million were raised in capital by green bonds. Rs 244 crore solar power plant

The Subscribe to issue February 10 and the public issue will be closed on Tuesday, February 14.

On On the first day, the green bonds were oversubscribed 5.42 times to the base price. Rs 122 crore.

This It is the first time a municipal body targets individual investors. India.

Reportedly, only up to 25% of the issue has been reserved for retail individual investors, and the allotment will be done on a first-come-first-serve basis.

The The base issue size is Rs 122 crore. You have the option to oversubscribe up to Rs 122 crore, which adds up to a maximum of Rs 244 crore.

MoreoverOnly a few are notable Indian Bonds are a source for finance for MCs. Bengaluru MC floated municipal bond for the first-time in India Following 1997 was Ahmedabad 1998: MC Since Then, Indian Municipal bond markets saw healthy growth from the mid 2000s to now.

NotablyIn 1995, the IMC became first municipal corporation listed on the National Stock Exchange Of India (NSE) for 2018 Ghaziabad MC was the first municipality to issue green bond in India In 2021 Moneycontrol reported.

IMC’s public issue of rated, listed, taxable, secured, redeemable and non-convertible green municipal bonds have a face value of Rs 1,000 per application with a minimum amount of Rs 10,000.

Each The bond is made up of four distinct, transferable (STRPP) principal parts. Each STRPP has a face-value of Rs 250.

The Green bonds can be held for three years (STRPPA), five years, seven years (STRPPB), nine years (STRPPD), and five years (STRPPB).

Investors You will be able to see all four tenors of each non-convertible debenture (NCD).

Experts feel that the risk associated with muni bonds is minimal And IMC carries a rating of AA+, which is the second-highest credit rating.

“While the issue is not sovereign backed, it is implied that if there is any complication tomorrow, the Madhya Pradesh government will step in. The corporation is also financially strong,” Moneycontrol quoted Vikram Dalal, Founder and Managing Director, Synergee Capital Services As a saying.

Deepak Panjwani, Head-Debt MarketsGEPL Capital, said, “Investors can go for Indore Municipal Corporation’s public issue as the city is continuously receiving the Clean City of the Country Award for the last couple of years and their corporation is working on the right path. Further, payable semi-annually, the yield is 8.42 percent, and investors can access that as interest rates are very near to their peak and over a period of time the yields will fall.”

MoreoverInvestors must also note that the draft offering document indicated that the corporation may not be able to market green bonds on NSE.

“As a result, the liquidity and market prices of the green bonds may fail to develop and may accordingly be adversely affected,” It said.

Indore Other key risks include cost overruns, delays and denial of GST compensation.

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