The index was launched at a Sebi workshop in Bengaluru. (File)
New Delhi:
NSE Indices Ltd, an NSE arm, on Friday mentioned it has launched the nation’s first ever municipal bond index.
The new Nifty India Municipal Bond Index will observe the efficiency of municipal bonds issued by Indian municipal companies throughout maturities and having funding grade credit standing, NSE Indices mentioned in an announcement.
The index was launched at a Securities and Exchange Board of India (Sebi) workshop on Municipal Debt Securities in Bengaluru.
Presently, the index has 28 municipal bonds issued by 10 issuers all having credit standing within the AA class. The index constituents are assigned weights primarily based on their excellent quantity.
The Indian municipal bond market has seen a resurgence of issuances after Sebi’s Issue and Listing of Municipal Debt Securities Regulations, 2015 got here into impact and a renewed emphasis on municipal finance by policymakers.
Raising cash from capital markets incentivises municipal companies to fund new initiatives and enhance civic infrastructure whereas encouraging them to develop into financially disciplined and governance oriented.
“The municipal bond market has a possible to play a pivotal function in financing the borrowing necessities of various municipal companies in India. The proceeds from bonds issued by municipal companies could be utilised to finance the growth of important municipal providers by growth-driven infrastructure initiatives and might contribute to bridging India’s city infrastructure financing hole,” Mukesh Agarwal, CEO, NSE Indices, mentioned.
The index is computed utilizing the whole return methodology together with worth return and coupon return. The index has a base date of January 1, 2021, and a base worth of 1,000. The index shall be reviewed quarterly
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