Municipal Corporations Need To Boost Transparency For Urban Infra Bonds: Sebi's Buch
Municipal corporations should enhance levels of transparency by obtaining credit ratings to burnish the allure of their bonds, creating digital escrow accounts to ring-fence certain cash flows and adding that investor appetite for quality securities remains strong, said Sebi Chairperson Madhabi Puri Buch on Wednesday.
Buch also called on these bodies to explore obtaining credit enhancement while speaking at an event on leveraging private finance for urban infrastructure learnings from the G20 Infrastructure Working Group in the capital.
There are a sufficient number of investors who are interested in putting money into securities issued by such municipal bodies if they adopt mechanisms of greater transparency, she pointed out.
She also said that a combination of credit enhancement and escrow (account structure) can attract a large number of investors in urban infrastructure.
In the budget for the financial year 2023-24, Finance Minister Nirmala Sitharaman said that the Centre is going to incentivise reforms in urban local bodies to make them more creditworthy for issuing municipal bonds.
In the past couple of years, bonds of certain municipal corporations have generated immense investor interest.
