It is the largest bonds issue in the country from a local authority
To raise funds to build Andhra Pradesh’s capital Amaravati, the state government has tapped the capital markets with the listing of 'Amaravati Bonds 2018' on Bombay Stock Exchange (BSE) on Monday. The bonds were issued by AP Capital Region Development Authority (AP-CRDA) for Rs 2,000 crore. The listing was made with Chief Minister Sri. N. Chandrababu Naidu ringing the bell at 9:15 am in an event, attended by BSE MD Ashish Kumar Chauhan, and senior officials from AP government.
The funds are being raised for the development of the upcoming capital where projects worth nearly Rs 27,000 crore are underway and those worth Rs 11,000 crore are ready to be awarded. An amount of Rs 2000 crore will be used as an equity pool and the government will keep investing towards equity contributions for various infrastructure projects at Amaravati.
While the bonds were issued for Rs 1,300 crore, they were oversubscribed by 1.53 times. The 10-year instrument is being offered at a fixed interest rate of 10.32%, paid quarterly, with a five-year moratorium on the principal payment. This will be redeemed at 20% every year for the next five years.
The Chief Minister has mandated APCRDA to explore innovative approaches to financing the capital city, which will highlight the financial efficiency, transparency and demonstrate project strength to investor community.
“Our growth rate is consistently moving forward, and I am confident it will cross 12-13%. We will be among the top 3 developed states in India in 2022 and want to become a leading global destination by 2050,” said the Chief Minister while addressing the gathering at BSE.
Through the capital, the state envisions to take its economy, which is currently at about $124 billion, to one trillion dollars by 2029.