The state government undertaking had, on September 5, made a Rs 350-crore private placement with a right to retain oversubscription. The issue closed on Monday.

The bond with a coupon of 14.50 per cent half-yearly was lead-managed by SBI Caps, Kotak Mahindra Capital Company, RR Financial Consultants and Allianz Capital & Management Services. Mantralaya sources said that all cheques received from investors had been deposited in banks.

Sources added the government's approval would be needed to retain over Rs 500 crore as it had allowed MJP to raise up to Rs 500 crore.

Observers said that the oversubscription will help the government which has come under severe attack from various quarters for financial mismanagement.

The list of subscribers include State Bank of India Rs 50 crore, Mumbai Port Trust Rs 30 crore, Central Bank of India Rs 25 crore, SBI EPFO Rs 20 crore, Unit Trust of India Rs 15 crore, Jawaharlal Nehru Port Trust Rs 14 crore, Gujarat State Cooperative Bank Rs 10 crore, Bank of Maharashtra Rs 10 crore, Syndicate Bank Rs 5 crore, Kapur Vysya Bank Rs 5 crore, Bank of Baroda Rs 5 crore, LIC Social Welfare Fund Rs 5 crore, Hindustan Cooperative Bank Rs 4 crore, Marathwada Gramin Bank Rs 3 crore, Dombivali Sahakari Bank Rs 2 crore and Sangli Bank PF Rs 1 crore.

Sources said the MJP had already raised Rs 300 crore through a bond issue in January this year and made necessary repayment arrangements. There has been assured budgetary support from the state through a tripartite agreement between the government, MJP and trustees to the bondholders.

MJP proposes to use the funds mobilised to implement various water supply and sewerage schemes both in urban and rural areas. It will be the nodal agency for the Rs 14,200-crore master plan prepared by the state government for water supply. MJP expects to execute projects worth Rs 13,500-crore, of which those with an investment of Rs 12,000-crore are expected to be implemented during the Ninth Plan (April 1, 1997 to March 31, 2002).

Various sources of finance for MJP include government grants, loans from LIC, Housing and Urban Development Corporation and open market borrowings. Aid has also been sought from external financial institutions like World Bank, DFID (ODA), KFW, OECD and IDA.

Around Rs 7,220-crore will be required to undertake urban water supply schemes in 13 municipal corporations (excluding Mumbai) and 231 municipal councils. In all, 350 water supply schemes for these cities/towns have been included in the master plan. As for rural water supply schemes, Rs 6,275-crore will be needed. The master plan has identified 27,654 of the total 40,785 villages for implementing the piped water supply schemes.