Coimbatore, Tiruppur Corporations raise funds through municipal bonds

Coimbatore and Tiruppur Municipal Corporations have raised ₹150.85 crore and ₹100 crore respectively through municipal bonds.

Sriram Krishnan, Chief Business Development Officer of NSE, told The Hindu in Coimbatore on Tuesday that Coimbatore has raised ₹150.85 crore at 8.29 % coupon rate, Tiruppur has raised ₹100 crore at 8.5 %, and Chennai has raised ₹205.59 crore at 7.95 %. Indore was the first Municipal Corporation to raise funds through bonds for its solar energy project. Nasik and Surat have also done so. “In other countries, trading in municipal bonds is high. The municipal bond market picked up in India in the last two to three years,” he said. The scope for Tamil Nadu to tap the potential in this segment is high, he added.

Funds raised through the 10-year bonds will be used in Tiruppur for the underground drainage project and in Coimbatore for the Semmozhi Poonga and the Kurichi-Kuniyamuthur underground drainage projects. The total project cost of the Semmozhi Poonga is ₹208.5 crore and the Kurichi-Kuniyamuthur project is ₹591.14 crore.

Official sources said that the State government should approve projects to raise funds through municipal bonds. The coupon rates are decided based on multiple factors. With better credit rating, the rates come down, they added.