Mumbai: The Securities and Exchange Board of India (Sebi), which has stepped up efforts to develop municipal bond issuances, recently brought together stakeholders in the country’s nascent civic debt market and urged them to raise money using this route to offer better infrastructure to citizens.
According to sources, Sebi held a two-day outreach programme on municipal bonds and financing during October 3-4 at Jaipur with officials from the ministry of housing and urban affairs, the finance ministry, municipal corporations, stock exchanges, credit rating firms, merchant bankers, debenture trustees, lawyers, and institutional investors.
Ashwani Bhatia, whole-time member, Sebi, delivered the keynote address, highlighting how municipal bodies could use funds raised through bond issuances for infrastructure development, sources said.
Pointing out the smaller scale of the municipal bond market vis-a-vis the government bond market or global civic debt markets, Bhatia emphasised the potential for municipalities to improve infrastructure while being fiscally responsible, they said.
Thara D, additional secretary of the housing ministry, said that the government would support municipal corporations wishing to access debt markets for funds, while Baldeo Purushartha, joint secretary, department of economic affairs from the finance ministry urged civic bodies to identify viable projects and plan for sustainable development.
Sebi officials raised awareness about an information database run by the market regulator, pointing out that the platform includes a repository of data on municipal bonds.
The repository contains checklists for pre-listing requirements, templates for agreements between various stakeholders and a potential due-diligence questionnaire for merchant bankers.
In 2015, the Sebi launched a regulatory framework for issue, listing and trading of municipal debt securities, which was reviewed in 2019. Since 2017, civic bodies across India have used the framework and raised funds worth around ₹2,500 crore.
