Financial Daily from THE HINDU group of publications
Friday, Aug 16, 2002
Financial Daily from THE HINDU group of publications Friday, Aug 16, 2002 |
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Industry & Economy
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Infrastructure BDA bond funds to finance urban infrastructure projects Our Bureau
BANGALORE, Aug.15 WITH a sustained recovery in its performance from a mere Rs 9.4 crore surplus a decade ago, the Bangalore Development Authority (BDA) has built a overall surplus of Rs 174 crore to become one of the few development authorities that have emerged successful. Its revenue saw a steep increase from Rs 44.9 crore in 1999-2000 to Rs 201.5 crore during 2001-02. The remarkable turnaround had been "spectacular" as the Chief Minister, Mr S.M. Krishna, said at a ceremony here to announce the closure of BDA's Rs 100-crore bond issue. The five-year secured redeemable non-convertible bond with a face value of Rs 10 lakh each had been floated on its own volition and without Government guarantee and with full subscription by Canara Bank and Indian Overseas Bank, underlining BDA's sound financial health. In fact, the high safety rating of LAA plus (structured obligation) given by ICRA was an endorsement of this fact, said Mr Jaykar Jerome, Commissioner, BDA. The most significant aspect of the Rs 100-crore bond issue, which carries a coupon rate of 8.5 per cent, was to underline BDA's intention to "pro-actively subject itself to market discipline" and not be dependent on the State's largesse. With this issue, BDA becomes a front-runner among Government bodies in India to access money from the market without any Government guarantees,' said Mr Jerome. The fund raised through the bond will be utilised for developing urban infrastructure like roads and flyovers. BDA witnessed a turnaround only in the last two-and-a-half years due to a sudden spurt in its basic activity of housing sites distribution, which stands at 30,000 sites as against only 3,400 sites 10 years ago. While this provided liquidity to the ailing BDA to fund its infrastructure projects like the Outer Ring Road, construction of grade separators, flyovers and underpasses, its efforts at recovery of encroached property fetched it Rs 400 crore during the period. Mr R.V. Shastri, Chairman and Managing Director, Canara Bank, which mopped up Rs 50-crore worth of the bond issue, said that the bank would try to trade it in the secondary market at an appropriate time. Indian Overseas Bank picked up the remaining portion of the bond issue.
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