| Market watchers point out that besides deficit levels of Maharashtra comparing favourably with those of other states, the attractive coupon rate of 9.5 per cent for 10 years made the latest bond offering of the special purpose vehicle an attractive investment option. |
| MIFC's (also known as Maharashtra Patbandhare Vittiya Company Ltd) latest bond issue is likely to be listed by Friday. The listing will also make it the first Maharashtra government backed entity to get listed on a stock exchange. |
| Chief secretary Ajit Nimbalkar is gung-ho about the state's fiscal situation. Says he: "The recent bond issue of the MIFC only goes to show the faith that financial institutions have in the Maharashtra government's repayment capacity. The reforms process (of keeping the revenue deficit in chech) has been impacted adversely by two main reasons. One, we were faced by a severe drought . Secondly, the series of fiscal measures that were to be followed could not be incorporated this year as it is an election year." |
| A host of factors "" 68 per cent of the State's revenue receipts estimated to come in by way of taxes in 2003-04, revenue deficit coming down could, in fact, see many state-owned entities raise resources at finer rates, say bond market traders. |
| "The State-owned corporations have not been defaulting on their repayments. If at all there has only been delayed payment to investors. So wholesale investors know that their investment is not unsafe," said a dealer. |
| "The bank could net handsome gains in the secondary market. MIFC's coupon rate will attract provident funds, who have to ensure a fixed return exceeding nine per cent on their corpus," they said. |
| MIFC had recently raised Rs 500 crore via private placement. The state government gave an unconditional and irrevocable guarantee on timely payment of interest and repayment of principal in maturity. |
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