Indore Municipal Corporation's (IMC) green bond of Rs 2.44 billion was oversubscribed within three hours of the IPO's opening on Friday, raising Rs 3 billion in interest and exceeding the Rs 6 billion barrier by 5 p.m.

To lower its electricity costs, the local civic body will build a 60 MW captive solar power plant on 100 acres of property in Khargone.

On Saturday, technical bids for the solar plant's construction will be opened. "IMC today became the country's first civic body to issue an IPO," said ISCDL CEO Divyank Singh, adding that the "overwhelming response of investors" has strengthened IMC officials' confidence. "It's a reflection of the faith in IMC and the distinct identity the country's cleanest city has created on the world's map," he said.

"The bond issuance opened for subscription at 10.30 a.m., and by 1 p.m., it had received a phenomenal response, raising Rs 3 billion in interest," Indore mayor Pushyamitra Bhargava said. The bond issuance concludes on February 14, and the mayor expects for "at least a five-fold increase in interest" before then.

"The face amount of each bond is Rs 1,000 apiece, containing four individually transferable and redeemable principal sections of Rs 250 each," Singh explained. IMC expects to earn Rs 2.44 billion from the sale of 24.4 lakh bond units. The subscribers will be divided into these units in proportion to their demands while funds to the tune of Rs 2.44 billion will only be raised and the rest will be returned," he explained.

Singh further stated that the buyers will be provided an annual coupon rate of 8.25%, payable semi-annually, and an effective yield of up to 8.42% on the investment.

On February 22, the IPO will be published on the National Stock Exchange (NSE), allowing buyers to trade the bonds. "Now, we are confident of embarking on some other development projects with this type of money in the near future," he said.

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