Post News Network
Bhubaneswar, Nov 22: As part of the market borrowing plan, the state government will raise Rs 1,000 crore through sale of 5-year bonds, auction for which is scheduled on November 24, a Finance Department notification said.
“The proceeds of the loan will be utilized to finance capital outlay for creation of capital assets,” the department said adding that consent of the central government has been obtained for floating this bond.
The state government bond will be auctioned by Reserve Bank of India on November 24, result of which will be displayed on the same day. The payment to the successful bidders will be done on November 26, 2015.
“The bond tenure will be for 5 years and the loan will be repaid at par on November 26, 2015,” the department said.
The coupon rate will be determined after the auction process. Notably, the state after nine long years resorted to market borrowing during last fiscal.
Market borrowing is one of the routes available to state governments to fund their capital expenditure plans along with meeting revenue short fall if any.
During the current year’s budget, the state government has estimated to borrow Rs 7,356.38 crore from market.