Tamil Nadu Chief Minister M.K. Stalin and National Stock Exchange chief economist Tirthankar Patnaik among others in the bell ceremony to mark the listing of the municipal bonds of the Greater Chennai Corporation in the National Stock Exchange during an event in Kalaivanar Arangam in Chennai on May 26, 2025
| Photo Credit: R. Ragu
Chennai has joined the list of urban local bodies in the country that have listed their municipal bonds in the National Stock Exchange (NSE) to raise funds for their projects. Tamil Nadu Chief Minister M.K. Stalin attended the bell ceremony in Chennai on Monday (May 26, 2025) to mark the listing of the Greater Chennai Corporation’s (GCC) municipal bonds in the NSE.
Speaking on the occasion, NSE chief economist Tirthankar Patnaik said three other municipal corporations from Tamil Nadu — Coimbatore, Tiruppur, and Tiruchi — were in the process of raising funds through municipal bonds. “It is always a delight for us at NSE when urban local bodies make use of capital markets as an alternative means of financing.”
The private placement of the GCC’s municipal bonds, with a base issue size of ₹100 crore and green shoe of ₹100 crore, received “overwhelming response” with an overall subcription of 4.21 times, he said. “We hope that today’s successful listing will inspire many more urban local bodies to look at capital markets as a promising avenue to raise funds,” Mr. Patnaik said.
The GCC is intending to utilise municipal bond proceeds to partly finance the ongoing works for the Integrated Storm Water Drainage Project (ISWDP) in Kosasthalaiyar basin, which is to be implemented at an estimated cost of ₹3,059 crore. The project aims to construct a robust drainage network that channels excess stormwater into the Kosasthalaiyar basin. The GCC has undertaken the restoration, deepening, and widening of 65 lakes and ponds in this basin.
The ISWDP is to be implemented in three phases — Phase I (11 packages), Phase II (18 packages), and Phase III (17 packages). As of May 25, 28 packages have been completed and 18 more are under execution. Welcoming the gathering in Kalaivanar Arangam, Mayor R. Priya said that the GCC was the first in Tamil Nadu to issue municipal bonds in the NSE.
The GCC has raised funds to the tune of ₹200 crore by issuing bonds through the NSE for an interest rate of 7.97% for 10 years. India Ratings and Acuitte have rated the GCC municipal bonds as AA+, an official release from the Tamil Nadu government said. Under AMRUT (Atal Mission for Rejuvenation and Urban Transformation) 2.0, the GCC would get an incentive of ₹26 crore for having issued bonds in the stock exchange to raise funds for urban infrastructure projects.
Later in the day, GCC Commissioner J. Kumaragurubaran told reporters that the GCC was planning to list municipal bonds for the multi-modal facility at Broadway bus stand, which is a ₹822-crore project. While the GCC’s commitment to the multi-modal facility in Broadway was estimated at ₹579 crore, the corporation was hoping to issue bonds to raise funds for ₹500 crore, he said. Ministers K.N. Nehru and P.K. Sekarbabu; Chennai Mayor R. Priya; Chief Secretary N. Muruganandam and senior officials were also present during the event.
‘Will pave the way for future listings’
GCC Deputy Commissioner (Revenue and Finance) M. Birathiviraj told The Hindu that this success could pave the way for future listings.
From October 2024 to May 2025, the GCC has been preparing for the Integrated Storm Water Drain Project bond issuance, conducting due diligence as per SEBI regulations. “This groundwork has now created a strong framework, making future listings much easier,” the official added.
However, the official stated that not all infrastructure projects are suited for this model. “Projects like roads and bridges may not be feasible for bond-based financing due to technical complexities — it must be a larger and captive project and have continuous progressive status. The GCC’s share must also be high. Bridges may also have long timelines involving land acquisition.”
“Besides financial strength, this project also generates easy revenue, which will increase investors’ confidence. Hence, projects like Broadway Bus Stand are also being considered,” he said.
The success of the current listing marks a milestone in municipal finance, offering a potential roadmap for other civic bodies to follow suit, he added.
Published – May 26, 2025 01:53 pm IST