Patna Municipal Corporation Raises Rs 200 Crore Through Maiden Municipal Bond

(MENAFN- KNN India) Patna, Nov 12 (KNN) Patna Municipal Corporation (PMC) has raised nearly Rs 200 crore through its maiden municipal bond issuance, becoming the first urban local body in Bihar to tap the capital market for infrastructure financing.

The corporation raised Rs 199.99 crore on October 30 against a base issue size of Rs 100 crore, with bids exceeding Rs 205 crore. The bonds carry an annual coupon rate of 9.20 per cent and have a tenure of 10 years.

Rs 200 Crore To Fund Urban Infrastructure Projects

The proceeds will be used to develop urban infrastructure at 15 locations across Patna, including organised vending zones, commercial complexes and public facilities. The redevelopment of New Market near Patna Junction is among the identified projects.

The bond listing was marked by a ceremony in Patna on Tuesday, attended by Bihar Chief Minister Samrat Chaudhary. Patna Mayor Sita Sahu said the issuance would strengthen the corporation's financial capacity and support civic infrastructure development, reported ANI.

NSE Sees Potential For Wider Municipal Bond Market

Speaking at the event, Krishnan Iyer, Senior Vice President, National Stock Exchange (NSE), said the successful issuance could encourage other municipal corporations to explore capital markets for raising funds.

He noted that municipal bonds provide an alternative financing avenue for urban local bodies, while offering investors interest income. He also highlighted the potential for civic bodies to raise funds through green and blue bonds for environment-related and waterway development projects.

Iyer said institutional investors accounted for the bulk of investments in PMC's bond issuance, adding that greater retail investor participation could help expand the municipal bond market.

Bihar Becomes Eighth State To Enter Municipal Bond Market

Under the financing arrangement approved by the Bihar government, PMC will meet its debt repayment obligations through internal revenue sources.

According to Securities and Exchange Board of India (SEBI) data, 31 municipal bond issuances raised Rs 4,540.34 crore between 2017 and September 2026.

The issuances were undertaken by 22 municipal corporations across seven states, with Bihar becoming the eighth state to enter the municipal bond market under the regulatory framework.

(KNN Bureau)

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