Andhra Pradesh has raised Rs 2,000 crore via a bond offering at record subscription rates of 1.5 times, the state's Planning Board vice chairman C Kutumba Rao said.

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DEFENDING HIGH INTEREST RATE:

It would be wrong to assume that state has the permission for infrastructure bonds carrying interest of 6-7 percent. No state has the permission to come out with Infra binds on tax free basis

The states of Rajasthan and Gujarat also recently raised funds at interest rate of 10.15 percent

Don't think interest rate of 10.32 percent is high as interest rate regime is moving up

Saying the market rate of binds issued by UP Govt are trading at 10.48-10.5 percent, he said calling the Andhra Pradesh bond issue's coupon rate high was unnecessary

The central idea is to develop the core infrastructure in Andhra Pradesh, he added.

PROJECTS WILL HELP SERVUCE DEBT

The fund raising is not an issue at all for Andhra Pradesh, and the state was looking at making an overseas issue for Masala Bonds, Rao said.

Once the infrastructure is in place, Amravati would be generating revenue, and hence servicing debt won't be difficult.

Taking funds from bans, the government would also be providing budgetary support and make further borrowing as and when necessary.

The state has made an application of $750 million to World Bank, and is waiting for clearance

Expect more support from Central Govt

The state is planning to come out with a retail bond issue, waiting for approval from Sebi

Considering a retail bond issue of Rs 500 crore, the coupon rate will be determined later depending on market conditions

Andhra expected full cooperation from the central government for Amravati after the bifurcation/

Central assistance today is not as per expectation and the centre is not matching our pace of development

The state has raised Rs 2,000 crore via bind issue which has a green shoe option of Rs 700 crore