Bihar first municipal bond available on NSE online: Now you can invest in Patna Municipal Corporation bonds — here's how
Patna Municipal Corporation’s (PMC) maiden municipal bond issuance was listed on the National Stock Exchange (NSE) on 10 November, marking the first municipal bond issuance by an urban local body in Bihar.
According to an NSE press release dated 11 November, the ₹199.99 crore issue received subscriptions of over twice its base issue size from institutional investors.
The proceeds will fund 15 projects aimed at redeveloping market areas in Patna and improving urban services and public convenience. The issuance also expands the geographical reach of India's municipal bond market.
India has witnessed 32 municipal bond issuances, cumulatively raising around ₹4,740 crore through 23 municipal corporations. In FY26, 14 issuances raised approximately ₹1,756 crore, according to NSE. Here's what municipal bonds are and how retail investors can invest in them.
Harsh Vardhan Dawar, ACA, CFA, FRM, Founder of Wealth Cafe, said municipal bonds (Muni Bonds) are debt securities issued by urban local bodies (ULBs), such as municipal corporations in Patna, Mumbai, Pune and Indore, to raise funds for civic infrastructure projects, including water supply, sewerage networks, urban roads and commercial complexes.
Nishchay Nath, Founder and CEO of BondScanner, said municipal bonds allow urban local bodies to borrow directly from capital markets. A municipal corporation obtains a credit rating, issues bonds under SEBI's municipal debt framework and repays interest and principal from its revenues, such as property tax, user charges and rental income.
Government securities from RBI carry sovereign backing and are effectively free of credit risk, while municipal bonds depend on the financial health of the issuing civic body.
In August 2026, SEBI reduced their minimum face value from ₹1 lakh to ₹10,000, making them more accessible to retail investors, Nath added.
Dawar said SEBI's ILDS Regulations require issuers to set aside specific revenue streams, such as property taxes, user charges and commercial rentals, in a dedicated escrow account managed by a SEBI-registered debenture trustee to ensure timely interest and principal repayments.
Municipal bonds generally offer higher interest rates than government bonds because of their higher risk profile. Their rates may compete with those of corporate bonds, depending on their credit ratings. Patna Municipal Corporation bonds offer an interest rate of 9.20%, with interest paid quarterly, he added.
Nath added that municipal bonds typically carry a fixed coupon set at the time of issuance. Interest frequency and repayment schedules vary from issue to issue and are set out in each bond’s information memorandum.
However, investors buying in the secondary market should look at the yield rather than the coupon. The return depends on the price paid, which moves with interest rates and demand. Interest is also generally taxable at the investor’s slab rate unless an issue is specifically notified as tax-free, he said.
Dawar said retail investors can buy these bonds in the secondary market through eligible stockbrokers, with a minimum investment of one bond, or ₹10,000. The purchase process is similar to placing an order for any listed security, and the bonds are credited to the investor's demat account on a T+1 basis.
Investors can also purchase them through Online Bond Platform Providers (OBPPs), such as IndiaBonds, GoldenPi, Wint Wealth, Jiraaf and Grip Invest.
Patna Municipal Corporation bonds have maturity periods ranging from four to 10 years, allowing investors to choose bonds according to their investment horizon, he added.
Nath said the process is similar to buying any listed bond. Investors need a demat account and either a trading account with a broker offering bonds or registration on a SEBI-registered online bond platform. This involves completing KYC formalities and linking a bank account. Interest and principal are paid directly into the linked bank account.
Given the limited liquidity in municipal bonds, Nath said investors should consider holding them until maturity.
Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance. <br><br> She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram. <br><br> Over time, she has developed expertise in covering market-linked stories, investor-focused topics, and regulatory updates in a simplified yet informative style. She also enjoys reading and listening to Hindi poetry, reflecting her appreciation for literature and creative expression beyond the world of markets and numbers.
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