Patna (Bihar) [India], November 10 (ANI): Patna Municipal Corporation (PMC) has become the first urban local body in Bihar to raise funds through municipal bonds, mobilising nearly Rs 200 crore from the capital market to undertake infrastructure development projects at 15 locations across the state capital.

The municipal bond listing was marked by a ceremony held at Taj City Centre in Patna on Tuesday, in the presence of Bihar Chief Minister Samrat Chaudhary.

The corporation raised Rs 199.99 crore through its maiden municipal bond issuance on October 30, against a base issue size of Rs 100 crore. The offering received bids exceeding Rs 205 crore, reflecting strong investor interest.

The bonds carry an annual coupon rate of 9.20 per cent and have a tenure of 10 years.

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

Speaking at the event, Patna Mayor Sita Sahu described the bond issuance as a significant achievement that would strengthen the corporation's financial capacity and support infrastructure development across the city.

'The development of any city is not merely about preparing plans. It also requires financial strength, vision and the determination to implement those plans on the ground,' she said.

Sahu highlighted that the successful fundraising reflected growing investor confidence in the municipal corporation and would help improve civic infrastructure and public facilities.

'This is not merely a means of raising funds but also a reflection of Patna Municipal Corporation's growing financial capacity and the confidence of investors,' she added.

Meanwhile, speaking to ANI on the sidelines of the event, Krishnan Iyer, Senior Vice President at the National Stock Exchange (NSE), expressed hope that Patna's successful bond issuance would encourage other municipal corporations to explore the capital markets for raising funds.

'I hope other municipal corporations will also be inspired by this initiative and approach the public markets to raise funds,' Iyer said.

He highlighted that the Union Finance Minister has introduced incentives for municipal corporations through the AMRUT scheme, encouraging them to explore alternative financing mechanisms.

Iyer noted that municipal bonds offer benefits to both investors and issuers, as investors earn interest income while civic bodies gain access to funds for development projects.

Referring to the listing ceremony in Patna, he said the participation of the Bihar Chief Minister in the bell-ringing ceremony would help popularise municipal bonds and encourage more civic bodies to enter the market.

'I believe this development will inspire more municipal corporations to explore the bond market as a source of fundraising,' he said.

Iyer also highlighted the potential for municipal corporations to raise funds through other instruments, including green bonds and blue bonds, depending on the nature of their development projects.

'For instance, if funds are required for waterway-related development projects, they can be raised through blue bonds,' he said.

He further noted that institutional investors accounted for most of the investments in Patna Municipal Corporation's bond issuance, while greater participation from retail investors could help expand the municipal bond market.

'I believe greater participation from retail investors would also be beneficial, as they could earn interest income from these bonds,' he added.

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

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

These issuances were undertaken by 22 municipal corporations across seven states, with Bihar becoming the eighth state to access the municipal bond market under the regulatory framework. (ANI)