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Core Purpose

This notification specifies comprehensive disclosure and compliance requirements for municipalities issuing debt securities, including those on a private placement basis.

Detailed Summary

This notification, published on July 1, 2026, in The Gazette of India, outlines extensive requirements for municipalities issuing debt securities, particularly on a private placement basis. It mandates financial disclosures including key financial figures (revenue income/expenditure, operating surplus, interest expense, debt ratios), details of the top five revenue sources for constituent Municipalities for the previous three years, and property tax collection particulars (demand raised, collections, and collection ratios for arrear and current). Issuers must also disclose borrowings of the Issuer and constituent Municipalities, covering secured and unsecured loan facilities, NCDs/Bonds (including top ten debenture holders), Commercial Paper outstanding, and other borrowings as on the latest quarter end. Legal and other information required includes pending litigations (criminal proceedings, actions by regulatory authorities, SEBI/stock exchange disciplinary actions from the previous five financial years, tax claims, and other material litigations), outstanding dues to creditors (consolidated number and aggregate amount, specific details for micro, small and medium enterprises, and material creditors), and material developments since the last balance sheet. Issuers must also provide details of material contracts and agreements, any material event affecting financials/credit quality, and non-payment of statutory dues. Government approvals, such as investment approvals from GoI, RBI, or other regulatory authorities, are required. The notification mandates specific undertakings from the issuer, including submitting documents to the Debenture Trustee, addressing complaints, completing listing formalities, a declaration by Directors (if a body corporate to which the Companies Act, 2013 applies) regarding true and fair information, and disclosure of utilized and unutilized monies from previous public offers. Required documents include the resolution authorizing borrowing, list of authorized signatories, and Trust deed (if applicable). Finally, it details risk factor disclosures, requiring them to be printed in a clear font (minimum point ten size), classified as project-specific/internal or external, determined by materiality (considering collective, qualitative, and future impacts), and presented with the risk and proposed solutions, covering comprehensive risks like project, operational, credit, and liquidity risks, along with management perception. The notification references the Securities and Exchange Board of India (Issue and Listing of Debt Securities by Municipalities) Regulations, 2015, published vide notification No. SEBI/LAD-NRO/GN/2015-16/006 on July 15, 2015, and its amendment on August 18, 2023, by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023, vide notification no. SEBI/LAD-NRO/GN/2023/146.

Full Text

REGD. No. D. L.-33004/99 The Gazette of India CG-MH-E-08072026-274254 EXTRAORDINARY PART III—Section 4 PUBLISHED BY AUTHORITY No. 423] NEW DELHI, WEDNESDAY, JULY 1, 2026/ASHADHA 10, 1948 4953 GI/2026 (1) 2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] [PART III—SEC.4] 3 4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] [PART III—SEC.4] 5 6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] [PART III—SEC.4] 7 8 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] [PART III-खण्ड 4] 9 Key Financial Figures | FY | FY | FY Revenue income | | | Revenue expenditure (Excl. Interest) | | | Operating revenue Surplus | | | Interest expense | | | Principal repayment (outside sinking Fund) | | | Contribution to Sinking fund | | | Revenue surplus | | | Capital income | | | Capital expense | | | 10 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] Total debt | | | Ratio of Total Expenditure /Total Revenue | | | Cash surplus / total revenue | | | Ratio of Debt Service / Total Revenue | | | Provided issuers who are desirous of issuing debt securities on private placement basis and who are in existence for less than three years may disclose financial statements mentioned above for such period of existence. II. Details of top five revenue sources for the previous three years of the constituent Municipalities: Revenue Receipt type | Actual | Actual | Actual | FY | FY | FY XYZ 1 | | | XYZ 2 | | | XYZ 3 | | | XYZ 4 | | | XYZ 5 | | | III. Details of property tax collection of the constituent Municipalities: Particulars | Demand Raised | Collections | Overall Collection ratio | Current Collection ratio | Arrear | Current | Total | Current | Arre ar | Total | | FY | | | | | | | | FY | | | | | | | | FY | | | | | | | | IV. Borrowings of the Issuer and constituent Municipalities Details of borrowings, as on the latest quarter end:- [भाग III- खण्ड 4] 23 a. Details of Secured Loan Facilities:- Lender's Name | Type of Facility | Amt Sanctioned | Principal Amt outstanding | Repayment Date / Schedule | Security b. Details of Unsecured Loan Facilities:- Lender's Name | Type of Facility | Amt Sanctioned | Principal Amt outstanding | Repayment Date / Schedule c. Details of NCDs/Bonds: - Debenture/ Bond Series | Tenor/ Period of Maturity | Coupon | Amount | Date of Allotment | Redemption Date/ Schedule | Credit Rating | Secured/ Unsecured | Security d. List of the Top ten Debenture Holders (as on ......) Sr. No. | Name of Debenture Holders | Amount Note: Top ten holders' (in value terms, on cumulative basis for all outstanding debentures issues) details should be provided. e. Details of Commercial Paper:- The total Face Value of Commercial Papers Outstanding as on the latest quarter end to be provided and its breakup in following table:- Maturity Date | Amount Outstanding f. Details of Rest of Borrowings. g. Details of any outstanding borrowings and debt securities issued for consideration other than cash, whether in whole or part, at a premium or discount, or in pursuance of an option; V. Sufficient revenue generation and resources for timely servicing and redemption. VI. Estimated Scenarios of Asset Liability Mis-matches, efforts intended to resolve the same. 9. Legal and Other Information: a. Pending litigations and material developments: 24 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III-SEC.4] Pending Litigations involving the issuer/ its directors/ promoters/ subsidiaries/ constituent Municipalities: (vi) All criminal proceedings; (vii) All actions by regulatory and statutory authorities; (viii) Disciplinary action including penalty imposed by SEBI or stock exchanges against the promoters during the previous five financial years including outstanding action; (ix) Claims related to direct and indirect taxes, in a consolidated manner, giving the number of cases and total amount; (x) Other pending litigation - As per the policy of materiality defined by the Board of Directors of the Issuer and disclosed in the offer document/placement memorandum. b. Outstanding dues to creditors of the issuer: (iv) Based on the policy on materiality defined by the Board of Directors of the Issuer, details of creditors which include the consolidated number of creditors and the aggregate amount involved of the Issuer and constituent Municipalities shall be disclosed, on the website of the Issuer with a web link and Quick Response (QR) code thereto; (v) Consolidated information on outstanding dues to micro, small and medium enterprises, separately giving details of number of cases and amount involved shall be disclosed, on the website of the Issuer with a web link and Quick Response (QR) code thereto; (vi) Complete details about outstanding dues to material creditors along with the name and amount involved for each such material creditor shall be disclosed, on the website of the company with a web link and Quick Response (QR) code thereto. c. If any of the above mentioned litigation, material developments or dues to creditors etc., arise after the filing the draft offer document/ preliminary placement memorandum, the facts shall be appropriately incorporated in the offer document/placement memorandum. In case there are no such cases, a distinct negative statement is required to be made in this regard in the offer document/ placement memorandum. d. Material developments since the date of the last balance sheet of the issuer shall be incorporated separately in the offer document or placement memorandum. e. Statement containing particulars of dates of, and parties to all material contracts and agreements of the issuer: Provided that a recognized stock exchange may call for such further particulars or documents as it deems appropriate. f. Any material event/ development or change having implications on the financials/credit quality of the issuer (e.g. any material regulatory proceedings against the Issuer, resulting in material liabilities, restructuring event, etc.) at the time of the issue which may affect the issue or the investor's decision to invest/ continue to invest in the municipal debt securities. g. Details of non-payment of statutory dues of the Issuer and constituent Municipalities, if any. [भाग III- खण्ड 4] 25 h. Details of all default/s and/or delay in payments of interest and principal of any kind of term loans, debt securities and other financial instrument issued by the Issuer, in the past 3 years. 10. Government approvals: a. Investment approvals, letter of intent or industrial license from GoI, RBI, etc., as applicable for the issuer, and declaration of the Central Government, Reserve Bank of India or any regulatory authority about the non-responsibility for financial soundness or correctness of the statements; b. All Government and other approvals which are material and necessary for carrying on the business and operations of the issuer and material subsidiaries. 11. Undertaking by the issuer: The following undertaking by the issuer shall be given: a. that it shall submit the documents disclosed in the offer document or placement memorandum to the Debenture Trustee in electronic form (soft copy). b. that the complaints received in respect of the issue shall be attended to by the issuer expeditiously and satisfactorily. c. that all steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the securities are to be listed are taken within the period specified by the Board. d. Declaration signed by the Director(s) of the Issuer, if it is a body corporate to which the Companies Act, 2013 applies, stating that offer document/placement memorandum contains true, fair and adequate information to enable investors to make a well informed decision making regarding their investment in the proposed issue. e. a statement to be given by the Board of the Issuer or Standing Committee thereof that all monies received out of the issue shall be transferred to a separate bank account. f. the details of all utilized and unutilised monies out of the monies collected in the previous issue made by way of public offer shall be disclosed and continued to be disclosed in the balance sheet till the time any part of the proceeds of such previous issue remains unutilized indicating the purpose for which such monies have been utilized and the securities or other forms of financial assets in which such unutilized monies have been invested. 12. Documents to be submitted (a) Copy of the resolution authorizing the borrowing and list of authorized signatories of the issuer. (b) Copy of the Trust deed, where the issuer is constituted as a trust. (c) Documents that have been executed or shall be executed in relation to the issue. 13. Risk factors: (a) Risk factors shall be printed in a clear readable font (of minimum point ten size). (b) Risk factors shall be classified as those which are specific to the project and internal to the issuer and constituent Municipalities and those which are external and beyond the control of the issuer and constituent Municipalities. 26 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III-SEC.4] (c) Risk factors shall be determined on the basis of their materiality. In doing so, the following shall be considered: i. Some risks may not be material individually but may be material when considered collectively. ii. Some risks may have an impact which is qualitative though not quantitative. iii. Some risks may not be material at present but may have a material impact in the future. (d) Each risk factor shall appear in the following manner: i. The risk as envisaged by the issuer and constituent Municipalities. ii. Proposals, if any, to address the risk. (e) Comprehensive Disclosure regarding the Risk Factors, including project risks, operational risks, credit risks, liquidity risks, etc. (f) Management perception of risk factors specific to the project.” AMIT PRADHAN, Executive Director [ADVT.-III/4/Exty./192/2026-27] Notes: The Securities and Exchange Board of India (Issue and Listing of Debt Securities by Municipalities) Regulations, 2015 were published in the Gazette of India on July 15, 2015 vide notification No. SEBI/LAD-NRO/GN/2015-16/006 and was last amended on August 18, 2023 by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide notification no. SEBI/LAD-NRO/GN/2023/146. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054. VINOD KUMAR Digitally signed by VINOD KUMAR Date: 2026.07.08 17:28:51 +05'30'

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