Patna Municipal Corporation Moves Towards Financial Self-Reliance with Bond Issue
The Patna Municipal Corporation (PMC) is embarking on a significant step towards financial independence by planning to issue municipal bonds valued at approximately Rs 200 crore during the 2026-27 financial year. This initiative is designed to strengthen the corporation's financial management and reduce reliance on external approvals.
Preparations and Timeline for Bond Launch
Preparations are currently underway for a formal launch scheduled for April, with the PMC actively working to secure necessary certifications and approvals. Following the initial issuance, general investors and institutions are expected to have the opportunity to invest in these bonds about four months later, broadening access to capital markets.
Leadership and Committee Oversight
PMC Commissioner Yashpal Meena will lead the newly established Bond Issuance Committee, which will oversee critical aspects such as setting interest rates and finalizing terms with intermediary agencies. Meena emphasized that this move will enhance the municipality's financial prudence and operational efficiency.
Addressing Project Delays and Administrative Hurdles
A senior PMC source, who requested anonymity, highlighted that the bond issue aims to tackle recurring delays in projects caused by administrative approvals at state or central levels. Currently, proposals must navigate multiple government departments, leading to interruptions. With self-generated funds, the PMC can initiate and complete projects independently, avoiding funding-related setbacks.
Technical and Legal Groundwork Progress
The corporation has made substantial progress on technical groundwork, including finalizing a merchant bank to manage documentation and structural details. On the legal front, the PMC is engaging with specialized firms to ensure compliance with Securities and Exchange Board of India regulations and to facilitate listing on the National Stock Exchange. The selection of a legal adviser for SEBI-related work is nearing completion.
Committee Composition and Fund Utilization
The Bond Issuance Committee will comprise key officials such as the additional municipal commissioner, deputy municipal commissioner, chief municipal engineer, and executive engineer. Funds raised through the bond will be allocated to essential urban infrastructure projects, including road construction and repairs, sewerage and drainage systems, water supply expansion, and street lighting improvements.
Joining Elite Civic Bodies and Investor Benefits
With this initiative, the PMC will join a select group of civic bodies like Pune and Ahmedabad that have successfully accessed capital markets. For investors, the bond offers a fixed-interest instrument backed by a local government body, providing a secure investment opportunity while supporting urban development in Patna.
