The Maharashtra government has issued a tender seeking applications from merchant bankers to raise a sum of Rs 1000 crore for funding the states irrigation-related projects.
The funds to be raised will be utilised for four irrigation projects Maharashtra Krishna Valley Development Corporation (MKVDC), Vidarbha Irrigation Development Corporation, Tapi Irrigation Development Corporation and Konkan Irrigation Development Corporation.
The tender issued by the state government sought bids for a lead co-ordinating arranger to raise debt from the private placement market. Sources said the merchant bankers were asked to suggest coupon for five, seven and ten year maturates, besides providing details on their work experience, net worth and overall performance.
Market sources said MKVDC had earlier shortlisted 22 merchant bankers for raising funds of which DSP Merrill Lynch was selected. However, faced with pressure from the merchant banking circle, the state had to issue a tender to appoint a co-ordinating merchant banker for the debt raising programme.
The entire exercise of raising Rs 1000 crore was undertaken by MKVDC because it also acted as co-ordinator for the other irrigation projects undertaken by the state.
In order the surpass further scrutiny from the market and ministry, the organisation has decided to issue a tender, said sources.
The tender is priced at Rs 20,000 from each applicant as processing fees which is non refundable and the form fee is Rs 1000 each. Sources said:
As many as 20 merchant bankers would have applied for the tenders and so MKVDC has made a clear gain of Rs 4,20,000.The tender was issued on February 6 and was slated to close on February 13, but was later extended to February 16.
The officials of MKVDC met the merchant bankers who had bid for the tender on the closing date and are yet to announce the lead co-ordinating merchant banker who would bag the award.
Sources point out: Already the cut throat competition in the private placement market has brought down margins earned by the merchant bankers and thus the tender cost, which is none refundable, would add to the burden.
