India Muni bonds fail to lure investors, global funds want more disclosure

Lack of adequate disclosure among Indian municipalities has stymied demand for such securities even among local investors

India’s recent step to expand its tiny municipal bond market isn’t winning much enthusiasm from bankers, a bad sign for cities desperate for money to build new bridges, subways and sewers.

The central bank said last week that it would allow foreign portfolio investors to buy muni bonds. But municipalities need to improve their fiscal health and report financials in a more timely manner to attract foreign funds, which also want to see more local participation, according Shameek Ray, head of debt capital markets at ICICI Securities Primary Dealership Ltd.

Prime Minister Narendra Modi’s ruling Bharatiya Janata Party has pledged to spend