Indore (Madhya Pradesh): Indore Municipal Corporation, which is going to list its public issue of green bonds on National Stock Exchange on February 10, has offered a coupon rate of Rs 8.25 per cent per annum payable half-yearly and an effective yield of 8.42 per cent per annum to potential investors.
“The investors are going to get coupon rate of Rs 8.25 per cent, which is 1.25 to 1.5 per cent more than the interest offered by banks on fixed deposits,” mayor Pushyamitra Bhargav told media persons on Wednesday.
The issue opens on February 10 and closes on February 14.
He said that the IMC has filed an offer document for the public issue of green bonds in four separate, transferable and redeemable principal parts (STRPP).
The face value of green bonds is Rs 1,000 each (comprising of 4 parts STRPP A of face value Rs 250, STRPP B of face value Rs 250, STRPP C of face value Rs 250 and STRPP D of face value Rs 250).
The green bonds have a tenor of three years (STRPP A), five years (STRPP B), seven years (STRPP C), and nine years (STRPP D).
The amount raised from the green bonds will be spent on installation of 60 MW solar power plant at Jalud pumping station in Khargone district.
“We annually spent around Rs 300 crore on the electricity required to pull out water from the Narmada river at Jalud and transport it to the city. When the 60 MW solar power plant will be setup at Jalud, our savings on power bills will be reduced by 25 per cent,” Bhargav said.
Hailing IMC for offering green bonds, Collector Ilayaraja T said that there are only a few civic bodies in the country which earn carbon credits from green initiatives. Other urban bodies will be motivated by IMC’s green bonds, he added.
Rs 300 cr required for solar plant
An estimated cost of Rs 300 crore is required for setting up the solar plant. The mayor said that they would raise Rs 244 crore from green bonds whereas the central government would give a grant of Rs 42 crore for the project. The remaining amount we will generate through carbon credits, he added.
IMC never defaults on any loan: Singh
Indore Smart City CEO Divyank Singh said that the IMC has never defaulted on any loans it has taken so far. In the financial year 2021-22, the revenue income of the IMC was Rs 1,739.95 crore, as compared to Rs 1,508.10 crore a year ago.
The expenditure of the IMC, excluding interest and depreciation was Rs 1,107.88 crore in FY22. Total debt in 2021-22 stood at Rs 579.43 crore, lower than Rs 648.45 crore a year ago.
Green bonds ratings
The Green Bonds have been assigned a rating of ‘CARE AA: Stable’ by CARE Ratings Limited and ‘IND AA+/Stable’ by India Ratings & Research Private Limited.
Lead managers to the issue are AK Capital Services Limited and SBI Capital Markets Limited and Vistra ITCL (India) Limited as trustees. The registrar to the issue is KFin Technologies Limited.
60 MW solar plant will contain 90K tonne Co2 annually
Municipal Commissioner Pratibha Pal said that IMC has been working on climatic issues and sustainability for the last five to six years and taking steps to check carbon emission and converting it to earn carbon credits. “So, we thought of taking one more progressive step of setting up solar plant at Jalud pumping station,” she said.
She stated that saving money spent on power bill is one thing but contributing to climate change through green initiative was another reason for opting for solar plant. The 60 MW solar plant will check the release of 90000 tonne Co2 per year which accounts for 40 lakh trees.
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