Agra’s first municipal bond oversubscribed 3.5 times, raises ₹50 cr for key projects

We are embracing new-age financing tools like municipal bonds to ensure fiscal prudence and drive development, says principal secretary (urban development)

LUCKNOW Agra has marked a major milestone in urban infrastructure financing by successfully raising ₹50 crore through its debut municipal bond, which was oversubscribed by an impressive 3.5 times. The issue attracted bids worth ₹174 crore via the National Stock Exchange’s electronic bidding platform, reflecting robust investor confidence in the city’s governance and financial management.

The funds raised will support four transformative projects under the Agra Nagar Nigam’s ambitious infrastructure plan. These include a 7.5 mw solar power project aligned with the sustainable development goals and Kyoto Protocol, expected to save ₹4.16 crore annually and reduce carbon emissions significantly. (Pic for representation)

Principal secretary (urban development) Amrit Abhijat called the success a reflection of UP’s innovative approach to urban development financing. “We are embracing new-age financing tools like municipal bonds to ensure fiscal prudence and drive development,” he said.

The bond, issued on a private placement basis at a competitive coupon rate of 8.15%, received an ‘AA’ rating from both India Ratings and Acuite. A notable highlight of the issuance was participation from international investor Julius Baer Capital (India) Private Limited.

The funds raised will support four transformative projects under the Agra Nagar Nigam’s ambitious infrastructure plan. These include a 7.5 mw solar power project aligned with the sustainable development goals and Kyoto Protocol, expected to save ₹4.16 crore annually and reduce carbon emissions significantly.

Additionally, a modern co-working space will be developed to boost business productivity in Agra, while a citizen facilitation centre within a recreation centre will improve access to municipal services and offer amenities like a gym, indoor games, and a library. A working women’s hostel will also be constructed to provide affordable, secure housing for female professionals, furthering women empowerment in the city.

Agra’s achievement follows similar successes in Lucknow and Ghaziabad, reinforcing UP’s leadership in municipal bond issuance. The state cabinet has approved ₹150 crore in bonds for Agra, Varanasi, and Prayagraj, further showcasing a shift towards market-driven urban financing. AK Capital Services Ltd acted as the transaction advisor, with AKS Consultancy as internal advisor.

The bond’s repayment is secured through a structured payment mechanism backed by the Infrastructure Development Fund of the UP government.