Enthused with the success of the Nashik Municiapal Corporation bond issue, three other municipal corporations -- the Aurangabad Municipal Corporation, Solapur Municipal Corporation and Jalgaon Municipality -- have decided to join the bandwagon. Lazard Creditcapital, which managed the Nashik Municipal issue, would be the sole arranger for these corporations.

The size of bond issues of AMC and SMC would be Rs 50 crore each and the proceeds will be used urban infrastructure and water supply, respectively, while Jalgaon Municipalty's Rs 200 crore bond issue would be mainly for airport construction, water supply, low cost housing and multi-storey complex.

The Nashik Municipal Corporation bond issue, which was rated AA (SO) by Crisil, carried a coupon of14.75 per cent payable semi-annually.

The proceedes of the bond issue will be utilised for part-financing the Rs 229 crore water supply and underground drainage projects which will cater to Nashik's requirements up to the year 2021.

Lezard Creditcapital director (structured finance) Shreekant Javalgekar told The Financial Express on Tuesday that a cross-section of financial institutions, nationalised banks, cooperative banks, insurance companies, regional rural banks and corporates have subscribed to the issue. Several Nashik-based cooperative banks have also made investments in the issue.

Javalgekar said that the amount was raised on the strength of NMC's own financial standing and without support of the government guarantee. NMC's revenue receipts in 1997-98 were Rs 173 crore while revene expenditure was Rs 88 crore leading to a revenue surplus worth Rs 85 crore.

In 1998-99, NMC's revenue receipts (estimated) was Rs 160 crore and the revenue exepnditure was reported at Rs 105 crore while therevenue surplus was estimated at Rs 55 crore.

Javalgekar said that NMC will finance the Rs 229 crore project through internal mobilisation and about 23 per cent grant from the state government in addition to the funds generated through the bond issue which was closed on May 31.

"NMC has thus paved way for other municipal corporations to raise money for various projects without depending on a state government guarantee," Javalgekar said.