Tag Archive for: Municipal bonds

Rhea Shah, Executive | finserv@vinodkothari.com

India may be said to be the land of munis and rishis; however, when it comes to what the capital markets know as munis, namely, municipal bonds, India lags substantially behind other bond issuing jurisdictions. The Municipal Bonds market is still at the nascent stage, thereby requiring a robust regulatory framework and other regulations to be in place for its effective functioning. Issued by municipal authorities and government entities to meet their day-to-day operational needs, munis in the Indian market context are generally seen as a favourable investment to make.   Our detailed articles on the subject may be viewed here^[1].

Munis in the Economic survey

As per the Economic Survey, the yields of municipal bonds during the year 2022-2023 have seen a significant rise, thereby enhancing investors’ interest in the market. The Union Budget was expected to bring about favorable outcomes for munis thereby having an effect of promoting the further development of the market and simultaneously ensuring its due regulation.  In the recent period, there has been a resurgence of municipal bond issuances in India, with nine MCs raising around ₹3,840 crore during 2017-21.