Varanasi to issue municipal bonds worth Rs 2 billion

January 8, 2021

Varanasi will issue municipal bonds worth Rs 2 billion to raise funds for investing in the city’s infrastructure development. The Varanasi Municipal Corporation (VMC) has added 89 villages to its municipal limits for the bond listing. The proceeds will be used to finance the capital expenditure and pay investors at a predetermined rate of interest. Varanasi needs funds to develop ghats (riverside), roads, flyovers, inland waterways, the Kashi Vishwanath temple, and a convention centre. Nine companies can participate in the bid to select a merchant banker for the listing. While municipal bodies with an AA or AAA rating can issue bonds, the current investment rating of VMC is BBB, which is required to be reformed and converted to AA for becoming investment grade. The city will be required to get the bonds rated by at least two rating agencies.