Chennai Corporation’s municipal bonds receive ‘overwhelming response’ in National Stock Exchange

Chennai's Greater Chennai Corporation lists municipal bonds on NSE to raise funds for urban infrastructure projects.

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 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 that 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 NSC.

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, 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 GCC 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.