Two municipal corporations – Kanpur Municipal Corporation and Indore Municipal Corporation – are planning to raise funds through municipal bonds in two to three months, people aware of the development told Moneycontrol.
Kanpur Municipal Corporation officials told Moneycontrol on condition of anonymity that they are planning to raise at least Rs 100 crore through a 10-year municipal bond issue.
Details regarding the Indore Municipal Corporation issuance is not readily available as the talks are in advance stages. However it is pegged that the issuance may be for Rs 100-200 crore.
Municipal bonds are similar to corporate bonds. The only difference is that they are issued by civic bodies to finance urban infrastructure projects.
Municipal corporations issue bonds to raise funds from individuals and institutions. Investors are promised a specified interest and return of the principal amount on the maturity date.
Emails sent to both municipal corporations remained unanswered till the time filing of this story.
Kanpur Municipal Corporation was supposed to issue these bonds last year, however, some queries raised by the government on the issuance delayed the process, a source said.
“The government has some query regarding the issue, and we were working on that. Now all due diligence is complete and we can bring the bonds in the market in the next two to three months,” the source cited above said.
On April 5, 2023, officials from Kanpur Municipal Corporation said these funds are expected to be utilised for the construction of an office-cum-commercial space, the development of BP Shrivastava market for women, and the AMRUT scheme.
Moneycontrol on July 9 reported that the Pimpri Chinchwad Municipal Corporation may also raise up to Rs 200 crore through green municipal bonds. The corporation has not decided a date for the bond issue because it is awaiting approval from the state government and other relevant authorities, sources said.
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