---
title: "India's muni bond market expands as nearly dozen cities set for debut issues"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/287054892.md"
description: "India's municipal bond market is set to expand as nearly a dozen cities prepare to issue bonds for the first time, driven by regulatory support and fiscal incentives. At least seven municipal bodies in Maharashtra aim to raise around 33 billion rupees ($340.8 million). The government has introduced measures to encourage bond issuance, including interest subsidies and incentives for first-time issuers. Major investors include the National Bank for Financing Infrastructure and Development."
datetime: "2026-05-20T11:06:18.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/287054892.md)
  - [en](https://longbridge.com/en/news/287054892.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/287054892.md)
---

# India's muni bond market expands as nearly dozen cities set for debut issues

By Dharamraj Dhutia and Khushi Malhotra

MUMBAI, May 20 (Reuters) - Close to a dozen Indian cities are set to issue municipal bonds for the first time this year, according to three ‌merchant bankers, as a regulatory and fiscal push boosts a fledgling market.

Authorities have long sought to ‌push municipal bonds that are typically used to finance urban projects ranging from transportation to sanitation in the world's most populous country ​that is rapidly urbanising.

Investors are also gradually taking greater interest in the market that was once plagued by concerns over opaque finances.

Over the past two years, regulators have pushed for regular financial updates while the government has offered fiscal incentives, boosting activity.

At least seven municipal bodies in the western Indian state of Maharashtra are prepping issues ‌worth at least 33 billion rupees ($340.8 million), ⁠according to the merchant bankers, who declined to be named as they are not authorised to speak to media.

The cities include several that encircle the financial capital Mumbai: ⁠Navi Mumbai, Panvel, Thane, Kalyan-Dombivli and Mira-Bhayandar.

The Municipal Corporation of Greater Mumbai, the nation's richest local body, has yet to tap the bond market.

Others looking to sell bonds this year include Chhatrapati Sambhaji Nagar and Nagpur in Maharashtra, ​Ujjain in ​central India, and Shimla, Moradabad and Gorakhpur in north ​India.

None of the city corporations responded to Reuters' ‌emails seeking comments.

"Overall, at least seven to 10 new issuers are likely to hit the market in fiscal 2026-27, with a bond issuance pipeline of at least 40 billion rupees already in place across public and private placements," said Umesh Khandelwal, chief business officer at Tipsons Group, which acts as an arranger for sales.

So far, 22 cities from seven states in India have raised around 45 billion rupees through bonds over the ‌last nine years, regulatory data shows. Funds in billion rupees targeted ​by debut issuers:

Navi Mumbai 10

Thane 10

Nagpur 5

Panvel 2

Kalyan-Dombivli 2

Mira-Bhayandar 2

Chhatrapati Sambhaji Nagar 2

Ujjain 2

Shimla 2

Moradabad 1

Gorakhpur 1

Total 39

India's markets regulator plans to allow ​municipal bonds to be issued for refinancing ​of loans and has permitted cities to offer higher interest rates to senior citizens, ‌women and retail investors.

Finance Minister Nirmala Sitharaman had ​announced an incentive of 1 ​billion rupees for corporations issuing bonds worth at least 10 billion rupees.

The government also provides a subsidy for maiden bond issues as well as a 2 percentage point interest support that makes ​such borrowing cheaper.

Major investors in municipal bonds ‌include the National Bank for Financing Infrastructure and Development, banks and state finance corporations, bankers ​said. NaBFID was the anchor investor in some issues last fiscal.

($1 = 96.8400 Indian rupees)

(Reporting by ​Dharamraj Dhutia and Khushi Malhotra; Editing by Mrigank Dhaniwala)

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