Way to go for SmartCities : Pune raises Rs 200 crs 10 yr Municipal Bonds @ 7.5% coupon with AA+ credit rating. To be used for a water project
Muni-bond a ‘smart’ way to raise funds
Pune Municipal Corp’s bond sale, at a coupon of 7.59%, is part of its Rs 2,260 crore borrowing plan spread over five years. The bond was oversubscribed nearly six times. Crisil had recently rated munis for 94 cities that are covered under Smart Cities and Atal Mission for Rejuvenation & Urban Transformation.
Real Estate Reg Act mandates registration & RERA website presence before starting marketing. Has slowed down new launches. Discipline !
RERA registration holding up new launches
The Centre barring developers from marketing even ongoing projects without having registered them online with state RERAs is holding up many projects. Of 35 states and UTs, 24 haven’t set up RERAs, and 32 haven’t developed a website.
National Assets perspective? Distress sale of power plants to statal entities = losses & loans passed on to taxpayers but asset for Rs 1
Powering long-term gain?
With NPA resolution in full force, power projects in many states are up for significant haircut in promoter equity. Some leading houses have offered controlling stake for Rs 1. The opinion is that even if loans & losses are passed on to taxpayers, it will be in the long-term national interest.
Transmission to see investment of around Rs 2.6 lac crs by 2022. Already evident in the performance and order books of T&D cos. Good times!
Buoyed by UDAY and reform efforts in some states, PowerGrid plans to invest Rs 1 lakh crore in the T&D sector by 2022, while Rs 1.6 lakh crore worth of projects will be bid out to private players. This will cut T&D losses and create grid support for 175,000 MW renewable generation in India.
Housing Fin Cos now flavour of d season : Nat Housing Bank gets 6 fresh applications. Like realtors, expecting boom in affordable segment
Small housing loans could mean big business
Six new entities have applied to National Housing Bank for approval as housing finance firms are targeting borrowers looking for loans of Rs 10-15 lakh. With affordable housing being their pick, many players are aligning their business with the current government’s social infrastructure agenda.
Special love for Solar : Waiver of interstate transmission charges was supposed to end on June 30th. Now extended to Dec 2019.
Taking a shine to solar
Interstate charges would add Rs 1-2.5/kWh, eroding solar’s competitiveness vis-à-vis thermal. Solar tariffs touched an all-time low of Rs 2.44/kWh. Pushing the end of waiver to Dec 2019 makes solar competitive, in line with India’s objectives.
Fear that SmartCities program may merely turn out to be a SmartEnclave program coming true. 80% of funds targeted at 2.7% of city areas
Smart enclaves, not cities
Of the Rs 1.31 lakh crore proposed to be spent on 59 cities from 2015-20, Rs 1.05 lakh crore will be on area-based development (ABD)—pockets in these cities will get WiFi hotspots, sensor-based public lighting, redesigned streets, start-up hubs, etc. The total area under ABD is 246 sq km, or just 2.7% of the area the 59 cities span; this will mean ‘Smart’ islands within cities.
Welcome greening of mass urban transportation : Delhi Metro expects to get a sixth of its power requirement from solar in the near future
DMRC’s solar focus
Delhi Metro expects to meet a sixth of its power requirement from solar, which now accounts for 17 MW of the 140 MW that DMRC consumes. In the next five years, consumption is set to grow to 300 MW. DMRC has tied up with Rewa Solar Project in MP, from which it will get power at Rs 3.15 per unit.
States Gross fiscal deficit 2015-16 at staggering Rs 4.93 lac cr. With UDAY burden + debt waivers will get worse. Devlpmt projects at risk
States’ deficit swells
The states’ fiscal deficit has reached Rs 4.93 lakh crore in FY16. While the RBI estimates that it would have climbed down in FY17, the outlook for FY18 should seem worse, with the massive farm loan waivers in many states, UDAY and implementation of pay commission recommendations.
Author is Chairman, Feedback Infra; Twitter: @Infra_VinayakCh.