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Informist, Wednesday, May 27, 2026

 

By J. Navya Sruthi and Vaishali Tyagi

 

MUMBAI/NEW DELHI – The Brihanmumbai Municipal Corporation is likely to enter the corporate bond market soon to raise funds, with bidding for the proposed issue expected to open on Jun. 16, an official from the civic agency's water supply and sewerage department said.

 

The civic body is currently in the process of appointing merchant bankers to manage the fundraising exercise and will finalise merchant bankers on Friday, the official said. 

 

The issue size criteria set by the authority ranges from a minimum of INR 10 billion to a maximum of INR 95 billion, the official said. The final issue size will depend on market conditions and fund requirements at the time of bidding.

 

India Ratings & Research is the rating agency mandated for the proposed bond issue. The rating process is currently in its final stage and the rating is likely to be assigned next week, the official added. 

 

Municipal bonds have gained traction after the government's push to encourage urban local bodies to tap capital markets for financing infrastructure as multiple municipal bodies are planning to enter the market in the current financial year. The government has proposed an incentive of INR 1 billion for single municipal bond issuances of over INR 10 billion, while smaller and medium funds of up to INR 2 billion will continue to be supported under the Atal Mission for Rejuvenation and Urban Transformation scheme, according to the Union Budget for 2026-27 (Apr-Mar). 

 

As per a CareEdge study of 32 urban local bodies, the share of municipal bonds in total municipal debt was less than 20% as of Mar. 31, 2025. However, recent measures bode well for municipal bond financing. Bond issuances have seen a revival in FY26--municipal bonds worth INR 18 billion were issued in FY26 alone compared with INR 29 billion over a period of FY18–FY25. "This uptick is likely to continue into FY27 with the Union government's announcement of an incentive of INR 1 billion for a single bond issuance of INR 10 billion in the Union budget FY27," CareEdge said in its report. "To further support the deepening of the municipal bond market, SEBI (Securities and Exchange Board of India) has also proposed a revamp of municipal bond regulations while tightening disclosure and investor protection norms."  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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