
"We will take up some projects under PPP": Lucknow Commissioner
- Ajay Kumar Dwivedi, Municipal Commissioner, Lucknow Municipal Corporation
Lucknow is the new bond! The first city in the North India region--and the 10th in the country--recently released the bond of its municipal corporation for infrastructure financing. Amid a pandemic year, the Uttar Pradesh capital has bounced back with its city development plans. Ajay Kumar Dwivedi, Municipal Commissioner, Lucknow Municipal Corporation, discusses the success of the municipal bond, smart city projects, and upcoming opportunities for the building and construction industry, in conversation with SHRIYAL SETHUMADHAVAN.
Tell us about the success of the municipal bond that has been raised by Lucknow Municipal Corporation.
This process started almost a year ago when the cabinet passed a note indicating that a municipal bond should be issued by municipal bodies in Uttar Pradesh. We started with the effort; Lucknow Municipal Corporation received a double A rating, and that was the basis to get this bond issued. We then went on to improve our accounting and auditing system; our entire balance sheet was put in order. We then registered with SEBI for the issuance of this bond and roped in a transaction advisor who helped us in attracting investors. The base price of our bond was Rs 100 crore and Rs 100 crore was the greenshoe option. We took permission from the government to float a Rs 200 crore bond. Finally, when our bond was there for bidding, it was oversubscribed by 4.5 times with around 450 crore subscriptions. This is the first municipal bond, not only in Uttar Pradesh, but the whole of North India. Also, we received this investment at an attractive coupon rate of 8.5 per cent; this is the second lowest among all the 10 municipalities – Lucknow being the tenth – who have floated a bond.How will this raised amount be utilised?
The raised amount will be utilised for two projects – a Rs 195 crore housing project and a Rs 5 crore water supply project.Tenders have already been floated for both projects. The housing project has been planned for around 18 towers comprising a total of 700 apartments.
The project plan also includes a commercial area as well as a shopping complex. We will provide affordable housing to the EWS and LIG/MIG category, and comfortable housing for HIG. The housing project is located adjacent to another private housing project – Omaxe city – which has already been sold out. Evidently, the commercial potential is high, and we are in touch with many organisations where people are willing to go for pre-booking of our flats. We expect that most of our flats will be pre-booked as soon as the project is launched.
The water supply project is a smaller portion in the entire pond. It will provide potable drinking water to around 2,500 families.