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Investors’ meet in Mumbai to pitch for ‘Brand Amaravati’ in Vijayawada.

Posted by on May 23, 2018
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VIJAYAWADA: The AP Capital Region Development Authority (CRDA) will organise an investors’ meet on Thursday as part of fund raising for construction of the capital through issuance of bonds. With the necessary credit rating for the proposed bonds to be obtained by Wednesday, officials said the investors’ meeting would help in pitching for Brand Amaravati to the prospective investors.

A senior official said, “The credit rating has been finalised and we will get it by Wednesday evening. On Thursday, during the investors’ meet in Mumbai, proposal of bonds will be pitched to the investors by explaining them the prospects of investing in Amaravati.”While the interest rate of the bonds is yet to be decided, the CRDA expects to get the lowest possible rate. The officials also hope that there would be a good response to the scheme which they say is being done for the first time in the country, as the bonds are “backed by unconditional and irrevocable guarantee of the Government of Andhra Pradesh”.

For the record, the CRDA has also invited a Request For Proposal (RFP) to engage an ‘arranger’ for mobilisation of funds by issuance of bonds of up to Rs 2,000 crore. While the base amount to be mobilised by the arranger is Rs 500 crore, officials said the arranging firm would have a green shoe option of Rs 1,500 crore. Green shoe options mean an agreement that provides the right to sell more shares than originally planned.

“The interest rate depends entirely on the market on the day when we issue the bonds. If we get a good interest rate, we will immediately list the bonds in the market after SEBI’s approval. Else, we will wait for a better deal,” another official involved in the process of bonds’ issuance explained. The entire process of raising funds would be completed in 30 days, the official said. “Once the listing is done, we will get the money into our account at the end of the market hours the very next day. So, if we get a good interest rate, we will get done with the process by the first week of June.

Otherwise, we will get the money latest before the end of June as the arranger would mobilise funds in 30 days,” the official added. The Capital Region Development Authority officials said immediate funds through bonds would help them in expediting the capital construction. “Since we have fund crunch now, the cash flow will immensely help,” they said.

Source: Indian Express