Fitch assigns AA rating to Brinhanmumbai Municipal

MUMBAI: Credit rating agency Fitch on Wednesday assigned a national long-term issuer rating of AA to Brinhanmumbai Municipal Corp, the country's richest civic body.

The agency, which today assigned a national long-term issuer rating of AA to BMC, said "the ratings reflect the city's well-diversified and growing economy, stable growth in tax revenue, low dependence on Government grants and a strong budgetary performance."

The outlook on the ratings is stable, Fitch International Public Finance Team Associate Director Devendra Pant said in a release here, adding "it reflects Fitch expectations that investment-driven economic growth will fuel revenue growth and generate surpluses required for building and improving city infrastructure."

Fitch expects that increasing debt-burden would remain manageable, he said.

During FY 03-07, the Corporation's revenue income rose by a compounded annual growth rate (CAGR) of 10.3 per cent, while its tax revenue accounted for more than two-thirds of revenue income, the agency said.

On the other hand, its tax-revenue increased by a CAGR of 10.8 per cent during this period, with octroi collection contributing almost 46 per cent of the total revenue income, at a CAGR of 12.3 per cent in FY 07 alone, it said.

Fitch expects that the BMC will achieve a good degree of success in implementing the projects under Jawaharlal Nehru National Urban Renewable Mission (JNNURM) as well as the mandated reforms, the release added.