By Bhakti Tambe
MUMBAI, Jan 10 (Reuters) - Indian local government body Pimpri Chinchwad Municipal Corp (PCMC) is planning to raise 2 billion rupees ($24.32 million) through municipal bonds - its first.
With this, PCMC, located in the western state of Maharashtra near Pune, joins a small set of local governments raising funds via the Indian debt market.
The corporation is likely to tap the market in January-March, a PCMC official told Reuters, speaking on condition of anonymity as discussions are still private. PCMC is looking to raise funds for a riverfront development project.
"All the compliances and environmental clearances are in place. We are waiting for a go-ahead from the Maharashtra government, which will take a month or so," another official at the civic body said.
The bonds issued will be of three-year, five-year or seven-year tenors, depending on the market condition and demand from investors, the second official added.
The civic body was rated 'AA' by CRISIL and CARE Ratings in 2022 and is in the process of updating its rating.
SBI Capital Markets is the sole arranger for this municipal bond issue.
Between 2016-17 and 2020-21, nine municipal bodies have raised around 38.40 billion rupees through bonds, the Reserve Bank of India said in its report on municipal finances released in November.
This would be the first municipal bond by any authority in the current financial year. Indore Municipal Corp is also planning to raise 2.44 billion rupees through a public issue of green bonds, likely to launch next month, according to merchant bankers.
($1 = 82.2230 Indian rupees)
(Reporting by Bhakti Tambe; Editing by Janane Venkatraman)
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