BMRCL to raise Rs 500 crore through bonds

The Bangalore Metro Rail Corporation Limited (BMRCL) is planning to raise Rs 500 crore through bonds. Namma Metro was suspended for two months (April 27, 2021-June 21, 2021) due to the lockdown to curb the second wave of Covid-19. BMRCL also suffered a loss of Rs 170 crore due to suspension of services between March 22, 2020 and September 6, 2020 (169 days) during the first wave of Covid-19.

Prior to Covid-19, Namma Metro used to operate between 5am and midnight before Covid and daily ridership was around 5 lakh before Covid-19. Currently, BMRCL is operating only during peak hours (between 7am-11am and 3pm-6pm) and daily ridership is less than 50,000.

This is not the first time BMRCL is issuing bonds. In fact, BMRCL was the first Metro operator in the country to issue bonds to mobilise funds. In 2014, BMRCL raised Rs 300 crore from bonds, which was utilised to repay its high cost borrowings from banks. It had offered a coupon rate of 8.79 percent and had a tenure of 10 years (till 2024) with a face value of Rs 10 lakh per Non-Convertible Debentures (NCD)/bond. “BMRCL is planning to raise Rs 500 crore in the form of bonds/NCD at tenure up to 10 years”, said an official. BMRCL bond has been rated ‘AA Stable’ by Brickwork Ratings and India Ratings.

BMRCL Chief Public Relations Officer B L Yeshwanth Chavan said: “We have raised only Rs 300 crore through bonds so far. This Rs 500 crore is a plan and is still under process. The funds raised through bonds will be used for project costs not for any operational costs like paying salaries of employees”.

On June 8, 2021, BMRCL informed the National Stock Exchange that fare box and non-fare box revenue has been impacted by Covid restrictions during 2020-21. The revenue was only Rs 73.9 crore in 2020-21 compared to Rs 418.7 crore in 2019-20.

“In April 2021 alone, average revenue (fare box and non-fare box) was only Rs 9.42 crore due to the lockdown from April 27”, it said. In March 2021, actual revenue was Rs 14.37 crore (fare box and non-fare box) against the average peak levels of Rs 34.8 crore for a month during pre-Covid period.

“The total operational revenue of the company during 2020-21, has been provisionally estimated at Rs 73.9 crore, subject to audit, mainly due to the impact of the lockdown and resultant stoppage of train services during the first half of the financial year”.

“The revenue for the month of May 2021 will be nil due to the suspension of services and expected revenue loss will be around Rs 14.37 crore. “The estimated revenue loss for the first quarter (April 2021 to June 2021) is around Rs 33.6 crore. The estimated operating loss is expected to be Rs 50.5 crore for the quarter ending June 2021”, it adds.

“The restrictions are expected to be in place for some more time so the ridership will be substantially less and as a result revenue will be impacted in the near term and recovery of operating costs may be difficult”. Further, it stated that BMRCL has approached the state government for extended financial assistance and has also planned to meet its overheads and other financial obligations through short term borrowings from the banks”, it said.

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