Civic bodies avoid public bond issues

Public bond issues come with stringent regulatory requirements and involve higher issuance costs

- Abirami Sekar

India's municipal corporations continue to prefer private debt placements over public issuances to fund development projects due to ease and speed of execution, lower compliance burden, and greater control over investor selection.

Urban civic bodies raised ₹1,625 crore through private placements from 2020 to 2025 (till 13 June), while mobilising ₹244 crore via public issuances during the period, according to data from Prime database.

Indore Municipal Corporation was the only one to issue public debt in 2023. Municipal bonds are used to finance urban development projects.

"Public issues demand broader disclosures and investor mobilization," said Vishal Goenka, co-founder of India Bonds. Private placements, said Goenka, offer municipalities greater control over pricing and timing, making them the preferred route in India's evolving debt ecosystem.

Among recent examples, the Pimpri Chinchwad Municipal Corporation and Greater Chennai Corporation went the private placement route.