Patna Municipal Corporation is set to become the first issuer to tap the municipal bond market this fiscal year, ending a period of inactivity in a segment where investors help finance the buildout of crucial civic infrastructure. According to reports from The Economic Times, the civic body plans to issue 10-year bonds worth ₹200 crore, with bidding scheduled for October 30. This will be the first municipal bond by Bihar, marking a significant milestone for the state's municipal financing capabilities.
Early interest from investors like HUDCO and NaBFID indicates a growing momentum in the bond market, supported by governmental efforts to boost urban financing. As reported by The Economic Times, entities like HUDCO and NaBFID have already given their bids, with AK Capital serving as one of the arrangers of this paper. The rate is expected to be 150-175 basis points above the 10-year benchmark yield, reflecting current market conditions.
The 10-year yield has increased to 7.44% on Wednesday from 6.90% a month ago, according to The Economic Times. Despite this increase, Patna Municipal's ₹200 crore issue has already been presold, sources told ET. Municipal bonds gained traction as the Centre stepped up efforts to encourage urban local bodies to tap debt markets through targeted incentive schemes during the budget.
Kanpur Nagar Nigam is also gearing up to issue ₹125 crore soon, with Kanpur municipality expected to raise this amount in the coming months. As reported by The Economic Times, Kanpur Nagar Nigam got its ratings reaffirmed on Tuesday by CareEdge Ratings, providing confidence for the upcoming issuance.
