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WITH THE PUBLIC issue of several municipal bonds in the pipeline, retail investors can diversify their portfolio by adding exposure to urban infrastructure projects. Their repayment is linked to revenue streams such as property taxes, water charges, or project-linked cash flows.Nashik Municipal Corporation has launched its maiden public issue of green municipal bonds to raise 200 crore. The bond is offering a coupon of 8.05% per annum, payable half-yearly. The effective yield is 8.20% per annum with 3-10-years tenure.
The bond, which is rated Provisional CRISILAA+/Sta ble, aims to fund key water infra structure projects. The minimum investment amount is ₹10,000.Aditi Mittal, co-founder, India-Bonds, says municipal bonds occupy a unique space as they are infra-structure-backed, quasi-sovereign instruments that move indepen dently of any market volatility. “That alone makes them a genuine portfo lio diversifier. Safety-wise, India has seen zero municipal bond defaults to date,” she says.
Satinder Duggal
