Trading in municipal bonds will now be easier, NSE launches Nifty India Municipal Bond Index

NSE Indices Ltd, a subsidiary of the National Stock Exchange Limited (NSE), on Friday launched the country’s first municipal bond index. It has been named Nifty India Municipal Bond Index. In this, municipal bonds can be tracked.

Stating on behalf of NSE said that the bonds issued by the municipal corporations of India can be easily tracked in the Nifty India Municipal Bond Index. Along with this, the credit rating of the bonds in the index will also be given.

Trading in municipal bonds will now be easier, NSE launches Nifty India Municipal Bond Index
Trading in municipal bonds will now be easier, NSE launches Nifty India Municipal Bond Index

A total of 28 municipal bonds were included

The Nifty India Municipal Bond Index currently comprises 28 bonds from 10 municipal corporations. The rating of all is of the AA category. The weight of the bonds in the index is determined based on their outstanding amount.

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Trading in municipal bonds will now be easier, NSE launches Nifty India Municipal Bond Index
Trading in municipal bonds will now be easier, NSE launches Nifty India Municipal Bond Index

Mukesh Agarwal, CEO, of NSE Indices, said the municipal bond market has the potential to play an important role in financing the borrowing requirements of various municipal corporations in India. The proceeds from bonds issued by municipal corporations can be used to expand essential corporation services through infrastructure projects and contribute to bridging India’s urban municipal corporation gap.

1,000 base value

The index is constructed using the total return methodology, which incorporates price return and coupon return. Its base date has been kept as January 1, 2021, and the base value is 1,000. The index will be reviewed every quarter.

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