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Pune Municipality raises money through BSE bonds

Pune Municipal Corporation
Pune Municipality Corporation(PMC) has raised ₹ 200 crores through BSE bond while becoming the first civic body to do so.

Pune Municipality has raised money by issuing bonds through the BSE’s bond platform. The municipal body raised ₹200 crores through BSE bond and was oversubscribed by six times – approximately ₹1,200 crore. By doing this, the corporation has become the first civic body in the country. While this also marks the re-entry of municipal bonds after 14 years. Pune Municipal Corporation has raised ₹200 crore at 7.59% coupon for 10 years for its water supply for the entire city.

Union urban development minister M Venkaiah Naidu tweeted “New era dawns in municipal finance. History created by Pune Municipal Corporation by launching India’s largest municipal bond programme”. He also added that this step will improve availability of finance for more development works and projects, particularly under government’s Smart City programme.

Ashish Kumar Chauhan, CEO and MD of BSE said that PMC bond offering is a pilot case and it will help municipalities to understand the servicing aspect related to such papers. He added to say “We invite all the municipalities to raise the funds and follow PMC’s successful bond issuance”.

Beside New Delhi Municipal Council (NDMC) is likely to issue bonds for raising ₹200 crore by this month while Ahmedabad Municipal Corporation(AMC) would also hit the bond market to raise the similar amount of money in the next month. About a dozen municipalities are expected to raise ₹ 6,000 crore through municipal bonds during this fiscal year.

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