What is the Nifty India Municipal bond index?

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What is the Nifty India Municipal bond index? Blog Image


NSE Indices Ltd, a subsidiary of National Stock Exchange (NSE), recently launched the country's first-ever municipal bond index.

About Nifty India Municipal bond index :

  • It is India’s first-ever municipal bond index.
  • It was launched by NSE Indices Ltd, the subsidiary of India’s National Stock Exchange (NSE).
  • The index tracks the performance of municipal bonds issued by Indian municipal corporations across maturities and has investment-grade credit ratings.
  • The index includes municipal bonds issued as per the Securities Exchange Board of India Issue and Listing of Municipal Debt Securities Regulations, 2015.
  • Presently, the index has 28 municipal bonds issued by 10 issuers, all having credit ratings in the AA category.
  • The index constituents are assigned weights based on their outstanding amount.
  • The index is computed using the total return methodology, including price and coupon returns.
  • The index has a base date of January 01, 2021, and a base value of 1000.
  • The index will be reviewed quarterly.
  • It will act as a benchmark for passive funds, providing more investment choices to fixed-income investors and creating an impetus for asset managers to consider investing in such bonds



Q1) What is a Municipal Bond?

A municipal bond or muni bond is a debt instrument issued by municipal corporations or associated bodies in India. These local governmental bodies utilise the funds raised through these bonds to finance projects for socio-economic development.  

Source: NSE unit launches first Municipal Bond Index