The municipal corporation of Nashik, an Indian city northeast of Mumbai, is planning to raise as much as 2 billion rupees ($22.2 million) in its second municipal bond issuance.
The Nashik Municipal Corporation Ltd. will use the proceeds of the green bonds to finance water treatment and loss prevention projects, according to Manisha Khatri, commissioner at the local body. Khatri plans to raise the funds by March, she said, speaking on the sidelines of the listing ceremony for the city’s first municipal bond on Tuesday.
In selling the bond, Nashik joins a small group of local governments that have tapped India’s nascent municipal bond market. Officials have promoted the market for years as a key piece of Prime Minister Narendra Modi’s plan to improve urban infrastructure, and as an alternative to funding from state and central governments. It’s largely struggled to gain traction, with a handful of local bodies raising a total of 35.8 billion rupees ($399 million) since 2017.
Last month, Nashik, which is known as a famous Hindu pilgrimage site, raised 2 billion rupees through its maiden bond with a five-year maturity offering a coupon of 7.80%. Larger municipal bond sales have come from cities including Hyderabad, Ahmedabad and Pune, according to data from the Securities and Exchange Board of India.
Reporting by Saikat Das
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