Chennai, May 27 (IANS) In a landmark move aimed at bolstering urban infrastructure financing, Tamil Nadu Chief Minister M.K. Stalin on Monday formally inaugurated the listing of Greater Chennai Corporation (GCC) municipal bonds on the National Stock Exchange (NSE).

The event took place at Kalaivanar Arangam in Chennai, where the Chief Minister rang the ceremonial bell, marking a significant step in the state’s proactive efforts to mobilise innovative financial resources for urban development.

As part of the bond issue, the Greater Chennai Corporation has successfully raised Rs 200 crore at a highly competitive interest rate of 7.97 per cent per annum for a tenure of 10 years.

According to a release from the state Information Department, this is the lowest interest rate achieved by any municipal bond issued in India in 2025.

The bond issue received an overwhelming response from investors, with bids worth Rs 421 crore submitted through electronic bidding on the NSE – 4.21 times the base issue size of Rs 100 crore.

The response, the release noted, reflects strong investor confidence in the financial management of the Greater Chennai Corporation and the robustness of its urban development plans. The funds raised will be utilised for the Integrated Storm Water Drain (ISWD) project in the Kosasthalaiyar Basin, a key infrastructure initiative focused on flood mitigation and sustainable urban growth. The Kosasthalaiyar ISWD project encompasses eight major lakes and 71 smaller water bodies, and has been structured into 46 separate work packages.

As of May 22, construction has been completed on 30 of these packages, while the tendering process is ongoing for the remaining 16.

The ISWD project is expected to double Chennai’s rainwater storage capacity and significantly improve the city’s ability to manage floodwaters during the monsoon season. By integrating stormwater drains with nearby lakes, excess rainwater can be diverted into water bodies, thereby enhancing water retention and minimising the risk of urban flooding.

The municipal bonds issued by the Greater Chennai Corporation have been rated ‘AA+’ by both India Ratings and Acuite Ratings, underlining the strong fiscal management and creditworthiness of the civic body.

To further boost investor confidence and ensure the project’s viability, the Tamil Nadu government has extended financial assistance under the Project Sustainability Grant Fund (PSGF). Additionally, under the Union government’s AMRUT 2.0 scheme, the Greater Chennai Corporation will receive a Rs 26 crore incentive grant to support the municipal bond issuance – effectively offsetting part of the costs and reducing the financial burden on the Corporation.

During the listing ceremony, Chief Minister Stalin also presented mementoes to key stakeholders involved in the successful execution of the bond issue. The event was attended by State Minister for Municipal Administration K.N. Nehru, HR & CE Minister P.K. Sekar Babu, Chennai Mayor R. Priya, and Chief Secretary N. Muruganandam, among other senior officials.

This development marks a significant milestone in urban governance and infrastructure financing in Tamil Nadu, demonstrating the potential of municipal bonds as a viable model for sustainable urban development.

–IANS

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