Patna Municipal Corporation raises ₹200 crore through bonds, listed on stock exchange

The Patna Municipal Corporation (PMC) has raised approximately ₹200 crore through the issuance of municipal bonds. With this, the Patna Municipal Corporation has become the first urban local body in Bihar whose bonds have been listed on the National Stock Exchange (NSE). A formal ceremony was held on Tuesday to mark this historic listing, where Chief Minister Samrat Chaudhary inaugurated the process by ringing the traditional bell.

According to an NDTV report, this bond listing is being viewed as a significant step towards strengthening the financial independence of urban local bodies and creating alternative methods for securing funds for infrastructure development. For the first time, the Patna Municipal Corporation has raised funds directly from the capital market, which will now reduce its dependence on government grants and traditional sources of income.

The original size of this bond issue was approximately ₹100.03 crore. The bidding process was conducted on October 30 via the NSE's electronic platform, which saw demand exceeding ₹205 crore from investors. In view of this strong response from investors, the size of the issue was increased to approximately ₹200 crore, resulting in the corporation successfully raising a total of ₹199.99 crore.

An annual interest rate of 9.20 per cent has been fixed on these bonds, with a tenure of 10 years. Interest payments will be made on a quarterly basis by the corporation for the first four years. Subsequently, the principal amount and interest will be paid in quarterly instalments. Maturity dates for different tranches have been scheduled between 2030 and 2036.

The funds raised will be primarily utilised for the development of urban infrastructure. This specifically includes vending zones, commercial complexes, parking facilities, marriage halls, and community facilities. Patna Mayor Sita Sahu stated that the corporation plans to implement 18 development projects across 15 different locations in the city.

Providing further details, Mayor Sita Sahu said, "These projects include 12 vending zones, two marriage halls, one parking facility, one commercial complex, one hotel, and one community centre." She added, "Our objective is to systematise the current unplanned street-vending activities in the city and provide better civic amenities. Creating designated vending spaces will reduce pressure on roads and footpaths, improve traffic movement, and bring more order to the markets."