Kochi Corporation to shore up its credit rating ahead of floating municipal bonds

Kochi Corporation plans to issue municipal bonds for revenue-generating projects after discussions with SEBI, aiming to improve credit rating.

Having held discussions with the Securities and Exchange Board of India (SEBI) over the procedural formalities for issuing municipal bonds to fund its revenue-generating projects, the Kochi Corporation is set to initiate steps to improve its credit rating by fine-tuning and publishing its financial statements by enlisting a SEBI-accredited agency as a consultant.

This may be needed for the State Government to issue the relevant Government Order to enable the Corporation to take the project forward. The civic body has included the municipal bond proposal in its 2025-26 Budget.

Mayor M. Anilkumar and a team led by SEBI’s full-time member Ashwani Bhatia discussed the regulatory regime governing the issue of municipal bonds last Tuesday. Mr. Bhatiya pledged full support to Kochi city in its endeavour. Kochi is the first city in Kerala to decide on the municipal bond mode of mobilising resources.

“We have ensured political clarity and unanimity of the council so that there is continuity in leveraging the bond market for powering the Corporation’s projects. We have decided that bonds will be floated only for revenue-generating projects. We may be at the fag end of our term but are determined to clear the bottlenecks and complete the formalities so that the council to take charge after the local body polls later this year will be able to take it forward seamlessly,” said Mr. Anilkumar.

Initially, for a city of Kochi’s size, raising ₹25 crore through bonds may be sufficient to meet its investment requirements. The Detailed Project Reports for the projects to be funded through bonds may also have to be drawn up with expert assistance. The Corporation remains confident in using its idle land parcels to leverage the bond market.

Mr. Anilkumar pointed out the projects executed with the help of Cochin Smart Mission Limited as proof of how self-sustainable development projects could be ingeniously funded without straining the civic body’s finances. Many of these projects have been generating revenue and jobs besides providing a service to the public.

The Centre is also encouraging urban bodies to undertake development projects and plug infrastructure shortcomings through such financial models. This is evident from the SEBI officials’ visit to the city to discuss the municipal bond project. Investors would also be confident about such funding models. “After all, unlike the Centre or State Governments, local bodies can ill-afford huge debts,” he said.