MSRDC floats Rs 500 cr bonds

MUMBAI, Dec 18: The Maharashtra State Road Development Corporation Ltd (MSRDC) launched its Rs 500-crore bond issue on Tuesday. The private...

MUMBAI, Dec 18: The Maharashtra State Road Development Corporation Ltd (MSRDC) launched its Rs 500-crore bond issue on Tuesday. The privately placed issue has an option to retain Rs 500 crore worth of oversubscription monies. The fully-secured redeemable bonds have a face value of Rs one lakh each. "The bonds have irrevocable state government guarantee," said R C Sinha, vice chairman & managing director of MSRDC.

The issue will consist of two types of bonds, namely, tax-free and taxable bonds. While the tax-free bonds will carry a coupon rate of 11.5 per cent, the taxable bond will bear an interest rate of 14 per cent, said Sinha.The tax-free bonds will have a maturity of six and seven years with half the amount being redeemed after six years and the rest at the end of the seventh year. The taxable bond, having the the same face value, will have a maturity period of four years and 11 months.

DSP Meryll Lynch will be lead managing the issue while the co-lead managers will be SBI Capital Markets, I-Sec, IDBI and Kotak Mahindra. MSRDC will be targetting the institutional investors to subscribe to the issue. MSRDC is raising funds to part finance three of its projects, including Mumbai-Pune Express Highway with a project cost of Rs 1,512 crore, flyovers over the metropoliton city of Mumbai (Rs 1,500 crore) and the Railway overbridges in the state (Rs 296 crore).

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The corporation has already invited tenders for the construction work for the Mumbai Pune Express Highway. The highway will be constructed in two years, he said. While there will be an incentive for early completion, there will be Rs 30 lakh per week penalty charges for delay in the construction.

It is also in the process of appointing a management consultant for the project. The consultant company will be incharge of design and supervise the construction of the project. Based on Built-Own-Transfer (BOT), the project will be transfered to the state after 30 years. During the period, MSRDC will be able to collect toll from the users, however, the exact charges have yet to be worked out, he said.