A man walks in front of the Brihanmumbai Municipal Corporation (BMC) building lit up in the colours of India’s national flag on the eve of the 75th Independence Day in Mumbai, India, August 14, 2021. REUTERS
MUMBAI, Sept 22 (Reuters) – India’s richest city will launch its debut bond sale in the last quarter of the financial year, two sources aware of the matter said on Tuesday, joining a growing market in the world’s most populous country.
Brihanmumbai Municipal Corporation, which governs Mumbai, plans to raise around 95 billion rupees ($992 million) — the most by any local body — over one or more tranches, with the first sale due by March, the sources said, requesting anonymity as they are not authorised to speak to the media.The corporation did not reply to a Reuters email seeking comment.
India has been pushing cities to issue bonds to finance projects ranging from transportation to sanitation, instead of remaining dependent on bank loans. Over the past two years, regulators have pushed corporations for regular financial updates, while the government has offered fiscal incentives.So far this fiscal year, 2 billion rupees have been raised through municipal bonds, after a 17.5 billion rupee record issuance in the previous fiscal year. India’s fiscal year runs April through March.
At least half a dozen municipal bodies in the western state of Maharashtra are preparing debt sales as investor interest rises in the market that was once plagued by concerns over opaque finances.National Bank for Financing Infrastructure and Development, which has invested in many such issues, expects supply to cross 50 billion rupees this year.
“If some large issuances go through, we could also see the sales hitting 100 billion rupees this fiscal year, and we are playing an active role in activating this market,” Monika Kalia, deputy MD and CFO at NaBFID, said.
($1 = 95.7650 Indian rupees)
Reporting by Khushi Malhotra and Dharamraj Dhutia; Editing by Harikrishnan Nair
